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Tribunal slams N25m fine on MultiChoice over price increase

Published

2 years ago

September 8, 2022

The Competition and Consumer Protection (CCPC) Tribunal sitting in Abuja, on Thursday, awarded a N25 million fine against MultiChoice Nigeria Ltd, the operator of the satellite televisions, DStv and Gotv, for violating its restraining order on increase of prices of its services..

The three-member tribunal, headed by Thomas Okosun in a ruling, held that having been found culpable of breaching its order, the company was liable to pay the penalty.

“The 1st defendant (MultiChoice) is in contempt of this tribunal. So we have reviewed the position of Section 51(3) of FCCPC Act, 2018 and in compliance with the provision of Subsection 2 of the same Section 51, we hereby order the 1st defendant, MultiChoice Nigeria Ltd, to pay the sum of N25 million only as administrative penalty for contempt of this honourable tribunal,” Okosun declared.

Shortly after the ruling, counsel for MultiChoice, Jamiu Agoro, however, pleaded for a date to hear his motion which, he said, was not due for hearing, but the tribunal declined to grant his plea.

“Until we are informed by the registry of your motion and once it is brought to our notice, if it is necessary, it will be heard,” he said.

The News Agency of Nigeria (NAN) reports that the tribunal had, earlier, disagreed with MultiChoice over a notice of appeal the company brought to stay execution of the panel’s judgment.The tribunal rejected the request by counsel for the firm, Jamiu Agoro, to hear his notice of appeal seeking an order of the panel staying execution of its judgment delivered on Tuesday pending the hearing and determination of the appeal before the Court of Appeal, Abuja.

Agoro, upon resumed of the proceedings, had informed that after the company reviewed the tribunal’s judgment delivered, the firm decided to appeal the said decision.

He said two applications were filed and “one is an application seeking for staying of execution.”

He, however, said that though an appeal had been filed, MultiChoice was already taking steps to comply with the judgment, directing its Managing Director, John Ugbe, and directors to appear with the 2021 audited financial report on Sept. 8 (today).

The lawyer explained that there was no management staff of the company in Abuja at present that could have brought the report.

“In view of our motion for stay of execution which has been served on all parties, we pray that you set the motion down for hearing for the tribunal to look at our application if it is meritorious or not,” he said.

But the tribunal disagreed with Agoro, saying the business of the day was for the company’s management to appear before it with the audited report.
Besides, the panel said there was no motion on appeal before it.

You know the law counsel. First, those papers are not with us. The only reason we are here this morning is to make pronouncement on the penalty the 1st defendant (MultiChoice) is to pay.

“It is your right to appeal. The only point I took from you is that you don’t have your details here, rather than raising issues of appeal,” Okosun said.

The tribunal then stood down the matter to take it decision.

The News Agency of Nigeria (NAN) reports that the tribunal, had, on Tuesday, delivered it judgment in a suit filed by a lawyer, Festus Onifade and Coalition of Nigeria Consumers, on behalf of himself and others.

The claimants had sued the MultiChoice and the Federal Competition and Consumer Protection Commission (FCCPC) as 1st and 2nd respondents, shortly after the company, on March 22, announced its plan to increase price of its products from April 1.

The claimants prayed the tribunal for an order, restraining the firm from increasing its services and other products on April 1, pending the hearing and determination of the motion on notice dated and filed on March 30.

And the tribunal granted the ex-parte motion, directing parties to maintain status quo ante bellum.But despite the tribunal’s order, the company was alleged to have gone ahead with the price increase on DStv and Gotv subscriptions and other products.

Against this backdrop, the claimants, in a motion on notice asked the tribunal for an order directing the MD and the directors of MultiChoice to appear and show cause why they should not be committed to prison for willful disobedience of the order of the tribunal granted on the March 30.They also sought an order, directing MultiChoice to pay 10 per cent of its annual turnover for failure to comply with the order in accordance with Section 51 (1) and 2 of the FCCPC Act, 2018 and under the inherent jurisdiction of the tribunal.

Onifade averred that MultiChoice had a penchant for disobeying order of court.

The lawyer, who was the 1st claimant, said he was a loyal and long time customer of MultiChoice with DStv account number: 41353565835.

And on April 11, the tribunal again ordered MultiChoice to revert back to the old prices by maintaining status quo of its March 30 order, pending the hearing and determination of the substantive matter, but to no avail.

But while delivering the judgment on Tuesday, the tribunal ruled that the MD of the firm and the directors should appear with the 2021 audited financial report of the company before it on Sept. 8 (today).The Managing Director and directors of the 1st defendant (MultiChoice) are to appear before this honourable tribunal on Sept. 8 with certified true copies of their audited financial report of year 2021,” the panel declared.

The tribunal said that the audited financial report would “enable the tribunal determine the appropriate penalty to impose on MultiChoice for being in contempt of the orders of this honourable tribunal made on March.”

NAN reports that Section 51 of the CCPT Act states that a corporate body is liable upon conviction for contempt of a fine not less than “N100 million or 10 per cent of its turnover in the preceding year.”

The panel refused to grant the claimants’ prayer to direct the firm to adopt a pay-as-you-view model of billing for all its products and services.

However, it directed FCCPC to investigate if the firm adopts the package for its products and services in other countries, especially South Africa, and see how same could be adopted in Nigeria, and publish its findings within six month of the order.

The tribunal, in the judgment, also refused to grant the prayers of the claimants, seeking for an order directing the firm to revert to old price regime.
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The three-member panel held that the power to regulate prices of goods and services neither resides in the FCCPC, the regulatory agency, nor the tribunal, saying only the president of Nigeria could do so
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The tribunal also dismissed the claimants’ demand for a N10 million damages for unable to prove how they had suffered psychologically from the company’s act.

The panel, in the judgment, rebuked FCCPC over act of negligence to complaints by the consumers.

“The 2nd defendant (FCCPC) must also improve on its management of complaints from the public that it is established to serve .A situation where an aggrieved consumer does not get feed back on a duly filed complaint does not speak well for the country,” it said.

The tribunal, therefore, charged the commission to resolve all lingering issues between MultiChoice and numerous consumers of the products and services of the company.

NAN reports that Onifade, in an amended originating summons, granted by the tribunal on June 20, had sued the firm for N10 million damages.

The lawyer also sought the order directing and mandating MultiChoice to adopt a pay-as-you-view model of billing for all its products and services forthwith.

He further urged the tribunal to make an order directing the firm to make the local television stations in the country free and stop the company from cycled content.

But counsel for MultiChoice, Agoro, in a motion on notice, challenged the jurisdiction of the tribunal to hear the matter as the claimant lacked the locus to institute the action.

Jamiu had argued that the order of the tribunal made on April 11, asking MultiChoice to revert to old rates was made against a completed act, the firm, having increased its tariffs on April 1.The lawyer argued that MultiChoice had already configured all their devices for the increase in tariff to take effect before the tribunal made its order.

Agoro added that there was no evidence presented before the tribunal of damage that the claimant had suffered.

(NAN)