An application by lawyers for Meridian Communications Ltd to adjourn legal proceedings against Eircell might be interpreted as good news, counsel for Meridian told the Supreme Court yesterday.

However, Mr John Gordon SC added that he could not say any more at this stage. The court granted the application.

On April 18th, Meridian, whose wholly owned subsidiary, Cellular 3, trades as Imagine, obtained interim orders against Eircell, preventing it from terminating supply of airtime to the company and restraining Eircell from presenting a petition to wind up Meridian without court approval.

However, Meridian's application to continue those orders was refused on April 25th last.

Two days later, that refusal was appealed to the Supreme Court which granted interlocutory orders that were to continue until today. The Supreme Court was told Meridian was on the point of selling its 20,000-subscriber base, which it estimated was worth up to £10 million (#12.7 million), to one of Eircell's competitors. The court ordered that monies received from any sale were to be lodged in court.

Eircell claims it is owed £6.7 million by Meridian but the latter disputes that claim.

It contends no monies are outstanding because of a high level of error in billing by Eircell.

When the matter came before the Supreme Court yesterday, Mr Gordon asked that it be adjourned generally. Ms Justice McGuinness, presiding, adjourned the matter generally with no further order.

The application follows marathon litigation between the companies dating back some years.

Following a 95-day High Court hearing, Mr Justice O'Higgins, in a 158-page judgment delivered on April 5th, found for Meridian on a number of breach of contract issues it alleged against Eircell but rejected its contention that there had been a breach of competition law.

He also held Eircell did not hold a dominant position in the marketplace.

From about 1997, Meridian operated a volume discount agreement with Eircell which enabled it to rent mobile phone time in bulk from Eircell at considerable discount.

Meridian then rented this time to individual subscribers at prices lower than that normally charged to subscribers by Eircell.

In April 2000, Mr Justice O'Higgins, in an interim judgment, found Meridian was not entitled to enforce a renewal of the volume discount agreement.

Last month, the Supreme Court was told Meridian did not intend to continue its virtual mobile phone business in the future, but simply wanted to dispose of its customer base.