Zombie contract haunts Kordia and TelstraClear

Interpretation of non-compete agreement in dispute

A deal done in the last millennium is at the centre of a contractual dispute between TelstraClear and Kordia.

Details of the contract are scarce, but according to an industry source, it involves a deal struck in the late 90s between Kordia’s previous incarnation, Broadcast Communications Limited (BCL), and Clear Communications, which was eventually purchased by Telstra and became TelstraClear.

The industry source says the issue revolves around a joint venture between the two parties to lay fibre. As part of the joint venture, a non-compete agreement was signed in return for BCL gaining access to the fibre assets of TelstraClear’s precursors.

That contract is still in effect today and the source says the dispute has now gone to court.

General manager of strategic development at Kordia Susie Stone confirms there’s a dispute between the two companies, but says the matter hasn’t gone to court. Stone says the two companies are in discussions to resolve the dispute.

Kordia CEO Geoff Hunt says the dispute is around “an issue of interpretation” of the contract terms but like Stone, says the issue hasn’t gone to court.

Stone says the dispute does not impact on Kordia’s ability to deliver services and products to customers.

TelstraClear communications manager Chris Mirams would only say that “it’s not something we have public comment on”, when asked about the dispute with Kordia.

A 2003 BCL document lodged with the Commerce Commission says the company was instrumental in rolling out network linking and a fibre optic network for Clear Communications.

It says parts of its fibre optic network use equipment shared with TelstraClear and other parts share with other operators.

While details of the dispute remain unclear, it is possible Kordia’s move into providing retail services, through ISP Orcon for instance, in competition with TelstraClear has aggravated the situation.

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