Voda in legal strife over network contract
Network equipment provider Nokia Siemens Networks (NSN) has aired grievances against Vodafone Hutchison Australia in the Federal Court after the telco allegedly withdrew $8 million from a bond meant as a contract-based performance bonus.
VHA contracted NSN to manage its core network operations, which was terminated on 30 April 2010. The contract was worth hundreds of millions of dollars to NSN, but the dream quickly became a nightmare when the Vodafone network couldn't handle the explosion of services and became a laughingstock overnight.
Vodafone moved into damage control in February, announcing a network revamp to be completed by Chinese-based vendor Huawei instead of incumbent vendors NSN and Ericsson. The new deal would see Huawei work with VHA to install new 2G and 3G equipment at 8000 sites around the country.
Documents obtained by ZDNet Australia reveal that NSN filed a suit after VHA allegedly withdrew $8 million from a "performance bond" intended as a bonus for good performance on the part of NSN. NSN is claiming that the bond withdrawal is a breach of Australian Consumer Law.
In its application to the court, NSN wants declarations from Vodafone admitting that its alleged withdrawing of the $8 million was deceptive and misleading, while also demanding that VHA replace the $8 million before the parties sit down for a period of mediation. NSN is also demanding interest from the $8 million as well as legal costs relating to the case.
The case is set to go back before the court on 7 December. NSN wouldn't comment on the case when contacted by ZDNet Australia. VHA has this to say in regards to the matter:
"This is a procedural matter between Vodafone Hutchison Australia (VHA) and Nokia Siemens Networks Australia (NSN) regarding the interpretation of a contract in relation to service credits. The performance bond was established at the commencement of this managed services contract with NSN and we believe that this is standard practice in contracts of this magnitude and nature."
Vodafone's legal drama doesn't stop at a stoush with NSN, however. CommsDay has today reported that Vodafone is also facing a joint lawsuit reportedly worth $10 million from two resellers in Vodafone's dealer network.
The resellers claim that they suffered loss of business due to Vodafone's widely publicised network issues.