Smart loses appeal against ComReg

Smart Telecom has lost on all grounds its High Court bid to overturn the decision of the Commission for Communications Regulation (ComReg) not to grant it the lucrative 3G mobile phone licence. The decision clears the way for ComReg to award the licence to another party.

Smart's misfortunes were of its own doing and it "cannot point the finger at ComReg", Mr Justice Peter Kelly stated in a 113-page judgment yesterday that was strongly critical of Smart.

This was a company, the judge said, which tried and failed to make a policy of "bluff, bluster and threat" make up for a deficit in ability.

Smart, the judge found, "did not satisfy the conditions for the award of the licence within the times provided, or indeed at all".

Smart Telecom had brought the action after ComReg's decision last February not to award the licence to Smart Mobile Limited. ComReg said this was because of a failure by Smart to provide a €100 million performance guarantee bond in a form acceptable to it within the specified deadline.

In its proceedings, Smart Mobile Limited sought a declaration that there is a "concluded contract" between Smart and ComReg for the awarding of the licence. Smart also wanted an order restraining ComReg from awarding the licence to any other party or treating its negotiations with Smart for the award of the licence as being at an end.

Mr Justice Kelly said the provision of appropriate bonds was a matter of major importance and the failure by Smart to meet its obligation in that regard had to be viewed very seriously by ComReg. The regulator had done so in a reasonable and lawful fashion.

"Overall I get the impression that Smart is a company whose ambitions outstripped its abilities," he said. "It set about making up for that deficit by a policy of bluff, bluster and threat. It did not work." The judge found ComReg did all it could to assist Smart in attempting to meeting its obligations. He found Smart had attempted to engineer an extension of time when it knew that the bonds which it proffered were unacceptable to ComReg and in any event were not in a position to be executed because they had not even been approved by the relevant banks.

The judge found ComReg had at all times behaved in a perfectly reasonable and lawful way and gave ample opportunity for Smart to put its house in order.

Refusing to grant any declaration that ComReg was not entitled to treat its negotiations with Smart at an end, the judge said that, even if he had upheld Smart's substantive claim of breach of its entitlements, he would have been disinclined to grant the declaration because of the behaviour of Smart both in its dealing with ComReg and with the court.

"The deliberate attempt to try and 'engineer' a situation where ComReg would feel pressured to grant a further extension of times was not an honourable way to behave towards it," he said. He did not believe Smart had dealt appropriately with either ComReg or the court.