News & Events

High Court upholds ComReg's decision to withdraw offer of 3G licence to Smart

01 November 2006

The High Court yesterday, 31 October 2006, upheld the decision of the Commission for Communications Regulation (ComReg) to withdraw its offer of a 3G licence to Smart Mobile Limited (Smart).

ComReg withdrew the offer of the licence in February 2006 as Smart had apparently failed to comply both with the terms of its bid and with the conditions of ComReg’s 3G licence offer. Smart failed to provide ComReg with a €100 million performance guarantee bond in a form acceptable to it within the specified deadline.

Smart had sought a declaration that there was a "concluded contract" between Smart and ComReg in relation to the award of the licence.  Smart also sought 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.

In a 113 page judgment, Mr. Justice Kelly said that Smart's ambitions had outstripped its ability to perform and described its strategy as one of “bluff, bluster and threats”.  He considered that Smart's misfortunes were of its own doing and that it "cannot point the finger at ComReg". 

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

Costs and other matters will be dealt with on 9 November 2006.

Smart has been given 28 days to seek leave to appeal.

ComReg Chairperson, Isolde Goggin, said:

“ComReg welcomes today’s judgement, which confirms that ComReg’s original decision was correct, and that it followed fair and correct procedures. ComReg believes that it has been vindicated by the Court. While we are disappointed that the award of the 3G licence has been delayed, to the detriment of consumers, we are pleased that these legal proceedings on this issue have now concluded”.

ComReg has stated that it proposes, subject to any appeal, to make arrangements to offer the fourth 3G licence. 

Attribute to Robert McDonagh, Solicitor, Mason Hayes & Curran.

Robert McDonagh is a solicitor in the commercial department of Mason Hayes & Curran. For more information, please contact Robert at rmcdonagh@mhc.ie or + 353 1 614 5000. The content of this article is provided for information purposes only and does not constitute legal or other advice. Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.

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