Friday 15 December, 2017

Digicel still owed nearly $9M in customer payments by cellular dealer

Almost two months following a High Court order, Lollabee Cellular Limited is reportedly yet to pay a sum of almost $9 million debt to telecommunication company Digicel.

In a High Court order dated August 7, 2017, Lollabee Cellular, a former independent and exclusive dealer of Digicel, was ordered to pay $8,965,305.14 in debt, interest, and costs to the telecom company.

Of that total sum owed, over $8.8 million constituted payments from customers, collected by Lollabee on Digicel’s behalf between December 2016 and March 6, 2017.

Commenting on the judgement and subsequent inaction by Lollabee Cellular, Chief Executive Officer of Digicel Trinidad and Tobago, John Delves told Loop TT,

“This is not the way that Digicel does business and we’re very disappointed that it has come to this. We tried the cordial route and the gentlemanly route before it was escalated to the authorities. And even with the judgement that came down from the court, Lollabee Cellular still has not complied. The fact of the matter is that these payments due date back to last December.

Essentially it is the customers, their goodwill and good faith that has been eroded. They would have entrusted Lollabee Cellular with their bill payments.”

As part of an agreement signed in November 2013, Lollabee Cellular had been authorised to collect In Store Bill Payments (ISBP) from Digicel customers for telecommunication services rendered at locations at six different locations initially, then subsequently at four more authorised locations.

Lollabee Cellular would reportedly be entitled to a service fee on each ISBP but was required to deposit the sum from all ISBPs to Digicel on or before the sixth working day of each month.

According to court documents, Lollabee Cellular was “consistently late in remitting ISBP to the claimant over the period of August 2016 to November 2016” putting them in breach of their agreement with the telecom company.

According to the agreement, failure to make those payments in a timely fashion would reportedly be deducted from commissions payable to Lollabee Cellular, and incur late fees and could result in termination of the contract between Lollabee and Digicel.

Termination of the agreement is eventually what did happen in December 2016, when Lollabee Cellular was served with notice, and the effective date of termination cited as February 1, 2017. Lollabee Cellular was further instructed to cease collections of ISBPs on January 1, 2017, but after negotiation with Digicel was allowed to continue collecting customers’ payments for the month of January.

According to court documents, Lollabee Cellular requested an extension of six months in order to liquidate its indebtedness of outstanding ISBPs to Digicel and was granted an extension only to February 28, 2017.

On January 31, 2017, Digicel proceeded to suspend all ISBP collections at eight of the ten previously authorised Lollabee’s locations, only leaving the Trincity Mall and West Mall branches as effective collection points, in the interest of minimising the impact on Digicel’s customers.  

Digicel also instructed Lollabee’s to submit all outstanding customer payments and late fees for the previous year, as well as for the month of January 2017 by February 28, 2017.

However, Lollabee failed to pay the full outstanding sum by this date, and by March 6, 2017, had ceased collecting any in store payments at the West Mall and Trincity Mall branches.

Some payments to Digicel by Lollabee’s were made between February and April 2017, totalling $5,216,700. This left the sum of $8,873,953.43 still to be paid to Digicel, which Lollabee’s was ordered to pay in full no later than March 31, 2017.

Lollabee however, would once again fail to meet this payment deadline, and also fail to respond to a pre-action protocol letter which was subsequently issued by Digicel in early May 2017.

Subsequent legal action on the part of Digicel and a failure by Lollabee’s Cellular to present a defence to the breach of contract suit eventually brought against them, lead to the High Court’s August 7 ruling in Digicel’s favour.

Speaking to the Express on Friday, one of the owners of Lollabee Cellular, Sheldon Stephen, claimed that to his knowledge, a payment plan was being worked out between the two companies via their lawyers.

However, representatives for Digicel refuted this claim, stating that no such arrangements were being made.