South Africa-based MTN, Africa’s largest mobile service provider, must give Nigeria a good-faith payment before the Nigerian government can consider an out-of-court settlement of a $3.9 billion fine imposed in October, Pulse.ng reported.
Nigeria can’t continue negotiating with the telecom giant until a substantial portion of the fine has been paid to indicate its readiness to settle the issue, Nigerian Minister of Communication Adebayo Shittu told reporters in Lagos.
Nobody is interested in seeing MTN Nigeria liquidated, Shittu told reporters. He said MTN is a one of the success stories of the Nigerian entrepreneurship, characterizing it is a Nigerian company, according to BizTechAfrica.
Nigeria fined MTN $5.2 billion in October for failing to disconnect users with unregistered SIM cards. The fine was reduced by 25 percent after negotiations.
MTN gets about 37 percent of its revenue from Nigeria, Reuters reported, according to an earlier AFKInsider story. The company is suing, questioning Nigeria’s legal grounds for imposing the massive fine. Nigeria wants MTN to drop its legal action and settle, the Nigerian telecommunications minister said.
MTN’s infractions were committed under the administration of former President Goodlcuk Jonathan and exposed by the administration of President Muhammadu Buhari, Shittu said, according to BizTechAfrica.
“We don’t want MTN to die,” Shittu said, according to Pulse.ng. “99 percent of the staff are Nigerians. But when you default in the law, you have to bear the consequences. We want them to obey the law.”
Trials are long, expensive processes and settling a case may offer a way to avoid the expense of trial while still getting some compensation for the wrong that was committed, according to FindLaw.
Settling means ending a dispute before the end of a trial but it doesn’t necessarily happen fast. In reality, a case can meander through the court system for years, giving parties room to negotiate.
If the cost of settling is less than the cost and risk of going to trial, parties may be willing to settle. One party usually writes the other a demand or offer letter, outlining the strengths and weaknesses of the case, a calculation of likely damages, and a proposed settlement amount. Then the two parties begin their negotiations, and with any luck, settle the case before trial begins.
A judge in Lagos gave MTN until March 18 to try to reach a settlement with the Nigerian authorities over the fine, according to Reuters. The fine is more than twice MTN’s annual average capital spending over the past five years.
