BLUE LABEL TELECOMS LIMITED - Arbitration and litigation between Blue Label, Telkom SA SOC Limited (Telkom) and others

Arbitration and litigation between Blue Label, Telkom SA SOC Limited (“Telkom”) and others

Blue Label Telecoms Limited

(Incorporated in the Republic of South Africa)

(Registration number 2006/022679/06)

Share code: BLU ISIN: ZAE000109088

(“Blue Label”)

Arbitration and litigation between Blue Label, Telkom SA SOC Limited (“Telkom”) and others

Further to the SENS announcements made on 14 June and 20 August 2013, Blue Label advises as
follows:

In June 2011 Africa Prepaid Services Nigeria Limited (“APSN”), a subsidiary of Blue Label, launched
arbitration proceedings in South Africa (“the arbitration proceedings”) against Multi-Links
Telecommunications Limited (“MLT”), a subsidiary of Telkom at the time, for payment of the sum of
US$457 million arising out of the cancellation of a Super Dealer Agreement (“the SDA”). In terms of
the SDA, APSN acquired the right to market and distribute a range of products for MLT in Nigeria. In
the arbitration proceedings MLT has counter-claimed against APSN for payment of the sum of
US$123 million.

Evidence in the arbitration proceedings was due to be presented in November 2012, but was
postponed. The arbitration proceedings were due to recommence in February 2014.

In May 2013 Telkom and MLT obtained an order, without notice to APSN, in terms of which APSN’s
claim against MLT in the arbitration proceedings together with a costs order in APSN’s favour were
attached (“the attachment application”). The purpose of the attachment application was to found
and confirm the jurisdiction of the South African High Court (“the High Court”) over APSN in an
action instituted by Telkom and MLT against Blue Label, APSN and others. In the action Telkom and
MLT claim payment of damages in an aggregate amount of US$724 million (“the action”).

APSN launched an application in the High Court to set aside the attachment order. Telkom and MLT
conceded that the attachment order was misconceived and was a nullity.

In June 2013 MLT launched an application in the High Court in terms of the South African Arbitration
Act to set aside the arbitration agreement contained in the SDA (“the stay application”). APSN
launched an application for an order declaring that the High Court has no jurisdiction over APSN in
the action (“the jurisdiction application”).

On 19 August 2013, the High Court heard argument in relation to the stay application, the
jurisdiction application and the costs arising out of the attachment application.
On 6 September 2013 the High Court delivered judgement in terms of which:

    1. The jurisdiction application was dismissed with costs.
    2. The stay application was granted with costs.
    3. Telkom and MLT were ordered to pay APSN’s costs in the attachment application on the
       attorney and client scale.
    4. The Court directed that the question of the High Court’s jurisdiction over APSN in the action
       should be determined by the trial court.

APSN is in the process of considering the judgement with a view to deciding whether it should apply
for leave to appeal against the dismissal of the jurisdiction application and the grant of the stay
application.

The High Court did not make any determination on the merits of the claims in the arbitration and the
action.

The consequence of these events is that the arbitration proceedings will not continue in February
2014 and APSN will either pursue its claim against MLT in the High Court or in the arbitration
proceedings should APSN pursue and succeed with an appeal against the judgement of the High
Court.

A further update will be given in due course.



Johannesburg
9 September 2013
Sponsor: Investec Bank Limited

Date: 09/09/2013 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.