Airtel Risks Contempt Charges as Court rules that Scanad Has Case to Answer
The bid by Scanad Nigeria, a new advertising agency to commence full operations in Nigeria has suffered a major setback as a Lagos High Court presided over by Justice G.M. Onyeabor has ruled that the company and Scan Group, an advertising agency owned by Kenyan-born Indian has a case to answer in the dispute between Nigeria's advertising agency, PrimaGarnet Africa and Ogilvy Advertising network.
What this means is that Nigeria's GSM Company, Airtel risks contempt of court following its sack of PrimaGarnet and handing its brief to STB-Mcann, contrary to an earlier ruling of the same court. Scanad was almost taking over the Airtel account, allegedly against standing affiliation agreements before the series of court cases.
PrimaGarnet had approached the court seeking to reverse the sudden termination of its affiliation partnership with Ogilvy Africa. Scanad Nigeria, a subsidiary of Kenya-based Scan Group and which registered for business in Nigeria only in 2012 was joined as second defendants
But Scanad Nigeria, which has former president of the Advertising Practitioners Council of Nigeria (AAAN) as its Managing Director, had approached the court seeking to be removed as co-defendants in the suit on the grounds that it has no relationship with Ogilvy Africa, contrary to what was contained in the statement of claims of PrimaGarnet.
But PrimaGarnet, through its lawyer, Mr. Alade Agbabiaka (SAN) had argued that Scanad Nigeria, having taking over the business of Ogilvy Africa and being the owner of majority shares of Ogilvy Africa has a strong case to answer in the dispute that has pitted the Kenyan advertising agency against practically all the other Nigerian agencies.
Mr. Agbabiaka told the court there was no way Scan Group and Scanad Nigeria could separate itself from Ogilvy Africa and as such is complicit in the ongoing suit.
In her ruling, Justice Onyeabor agreed with the submissions of the plaintiff that Scanad and Ogilvy Africa cannot be separated and as a result has a strong case to answer. She threw out all the submissions of the defense, a development that means the injunction placed on Scanad which prevents it from doing business in Nigeria pending the determination of the suit still subsists.
Scanad Group, the Kenya-based agency is the owner of 51 percent of Ogilvy Africa. Trouble between PrimaGarnet and Scanad started, according to sources, when the Scan Group, a Kenya based marketing communications company owned by one Bharat Thakrar bought controlling shares in Ogilvy Africa and decided to enhance its African operations by opening in Nigeria. But PrimaGarnet, the Nigerian affiliate of Ogilvy had kicked against this move, citing its affiliation agreement with the Ogilvy network which prevents the firm or any of its related companies from opening for business in the country.
It will be recalled that the Affiliation agreement between PrimaGarnet and Ogilvy Africa was suddenly terminated by Ogilvy following the purported refusal of the Nigerian firm to accede to a takeover bid by Scanad. Bharat Thakrar, the Indian owner of Scanad, had, in a recent interview with a Nigerian news magazine, admitted desiring to take over 51 percent of the company, insisting he needed that to 'take full and absolute control of the company and be able to make the needed changes that would help raise standard of the Nigerian advertising landscape, which he also described as poor and below global standards.
The dispute also affected Airtel, Nigeria's GSM company which was hitherto managed by PrimaGarnet on the strength of its partnership with Ogilvy Africa. Following the termination of its affiliation agreement with Ogilvy, Airtel had also allegedly terminated its agency contract with the Nigerian agency, a situation that precipitated another court case in the same court.