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Telstra bid for secrecy over dispute with Kordia declined

Wednesday 6th October 2010

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The High Court in Auckland knocked back TelstraClear's bid for secrecy over a dispute with joint venture partner Kordia Group, saying the "public has a very real interest" in fibre networks.

Justice Timothy Brewer, in a September 28 judgement, upheld arbitrator Alan Galbraith's ruling this year that Kordia be allowed to unilaterally upgrade or replace parts of the co-owned transmission network. TelstraClear didn't think the arbitrator got it right, and was applying to appeal the decision. It also asked the court to keep all documents on file and the parties' identities secret.

"This is a dispute between two owners of a national fibre optic transmission network... the danger could be that speculation might cast doubts on the business relations of other transmitters," Brewer said in his judgement.

"I also consider that the public has a very real interest in cases concerning national fibre optic transmissions networks."

The dispute stemmed from historic contracts over how the two companies were permitted to compete, including the sale of unlit fibre to TelstraClear in 2000, leaving it with 75% ownership of the network.

The judge decided against letting TelstraClear appeal the arbitrator's ruling, saying Galbraith didn't make any error in law, and that the original contract excluded court supervision of arbitration.

"Although the points raised by the applicant are arguable I do not assess them as strongly arguable," Brewer said.

"The parties, with all the advantages of competently advised commercially astute bodies, agreed that all disputes arising under their contract would be decided by an arbitrator. They decided that the arbitrator's ruling would be final and that the review jurisdiction of this court would be excluded." 

Kordia called in the arbitrator after TelstraClear objected to it upgrading the network, which would have required access to the phone company's fibre for testing and would see the partners share information.

In making his decision, Brewer said a delay in his ruling "could substantially affect" Kordia's interests in the network, and that although no dollar figures were given, "it is obvious that very substantial amounts are involved".

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