Transcom’s legal rep clarifies stand against Chariot

VoIP vendor Transcom Australasia has terminated its wholesale distribution agreement (WDA) with Adelaide-based ISP Chariot, alleging several breaches of contract.

VoIP vendor Transcom Australasia has terminated its wholesale distribution agreement (WDA) with Adelaide-based ISP Chariot, alleging several breaches of contract.

Transcom Australia and its parent company, Transcom International (TCI), has filed a $3.2m claim in the Supreme Court of Queensland against Chariot and its two directors Peter Buttery and Robert Horlin-Smithin alleging breach of contract and other alleged mis-conduct.

Nav Basi, director, senior VP and general counsel Transcom, said the claim was based on an agreement between Transcom and Chariot under which certain products and services were expected to be made available to the local market.

Speaking to CRN Basi claimed that Chariot had made a $5m equity investment in the company in November 2004. This gave Chariot 80 percent shareholding in TCA together with the rights to a territory license agreement (TLA) valued at $1m.

“In November 2005, TCI and CTI in pursuant to a Deed of Memorandum restructured its local partnership in which CTI relinquished the 80 percent TCA shareholding and TLA. CTI decided to enter into a WDA to deploy our VoIP service under its own brand name,” said Basi.

At the time said CTI said it would roll out a VoIP service under the CTI name using TCI technology, by 2005. CTI delayed the project until December 2005 and then announced the service would be ready by February this year.

Basi claimed that despite CTI's ability to roll out the project during the agreed period of time, the project had not been forthcoming.

“The reason for delay in the roll out of the VoIP business by TCI has not been due to any default, breach or lack of performance by TCI under the new and old agreements with Chariot,” said Basi.

“It [the breach] is solely attributed to the CTI’s restructuring which itself is an absolute direct result of Chariot’s failure to meet its original commitments to TCA including (but not limited) to it commencing business operations under the $1m TLA."

Robert Horlin-Smith managing director Chariot declined to comment on the action citing the cases' status before the court. Instead he referred CRN to an ASX statement.

The statement said Chariot refuted without reservation, any suggestion by Transcom that Chariot has misled the market or shareholders.

"Chariot and its director will not only vigorously defend the legal proceedings which they regard as without foundation but will also take such action as they may be advised to protect the company and shareholders from Transcom’s actions and claims,” it said.

Basi said as of May 16th the WDA agreement between Transcom and Chariot had been dissolved. However Chariot remained a shareholder in TCI.