Newsletter April 2014


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H. No. 64, Main Nazimuddin Road,
F-8/4, Islamabad, Pakistan

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(92-51) 8438140-2

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Email:
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Protection of Telecom Consumer Rights

telecomRights of the telecom consumers, especially the cellular subscribers, have lately been under focus especially in relation to unverified SIMs and illegal use of SIMs by secondary users without the knowledge of the actual subscriber. However, we have observed that a lot of telecom consumers are still unaware of their rights and the mechanism to protect such rights. Protection of consumers interest is one of the functions of the Pakistan Telecommunication Authority (“PTA”) as laid down in the Pakistan Telecommunication (Re-organisation) Act, 1996 (the “Act”).

From 1996 to 2009, no regulations were in place to safeguard and protect the rights and interests of the telecom consumers. However, in 2009, PTA issued the Telecom Consumers Protection Regulations, 2009 (the “Regulations”), which were later amended in 2010, 2011 and 2012.

In this note, we shall briefly discuss the various rights of the telecom consumers and mechanism for redressal of grievances under the Regulations.

-          The first and foremost is right to choice of operator and the services. According to the regulations, a consumer has the right to choose the operator and the services it wants to receive from such operator. Meaning thereby that the operator cannot impose any service on the consumer against the consumer’s will and consent. Consequently, no operator can pre-activate any service or tie in two of more service as mandatory for the consumer.

 -         The Regulations further protect consumers’ right to be provided with services in a fair, transparent and non-discriminatory manner..

 -      The consumer has the right to be provided with uninterrupted service by the operator. As per the Regulations, if any planned system enhancement, updating or up gradation activity I likely to cause service interruption, the operators are obligated to inform the consumer about their planned network maintenance and upgrading activities at least 30 days prior to such activity. In case of an unforeseen interruption/fault, the operators shall be duty-bound to let the consumers know of the cause as well as expected time of restoration of the service.

 -          Operators are permitted to suspend or withdraw any of their services (apart from the mandatory services listed in their respective licenses). However, the Regulations do not allow the operators to withdraw any service for which the consumer has already made payment to the operator. Moreover, the consumer has the right to be notified in writing by the operator of such suspension at least 15 days prior to the date of suspension, and in case of withdrawal of service 90 days before the date of such withdrawal. In case of a limited time offers/bundle packages, such notice would be sent 30 days prior to the withdrawal.

 -          The Regulations have further protected the interests of the consumers by declaring certain commercial practices as unfair and thus disallowing the operators from using such unfair practices.

The unfair practices include practices which are contrary to the requirements of professional diligence or are misleading for the consumers in a way that it is likely to deceive the consumers about the existence, nature, characteristic, specification and/or expected results of the usage of the service. Unfair practices also include such commercial practices that contain false information or are presented in a way that consumers are misled to take a decision which they would not have taken otherwise.

The Regulations also bind the operators to calculate and present their tariffs for various services in a simple and straightforward manner which is not likely to deceive the consumer.

Remedies

The Regulations not only provide protection of rights but also prescribe mechanism to redress grievances of the consumers and penalties for infringement of the rights by the operators.

Operators are obligated to entertain and redress complaints from their respective consumers. Scope of such complaints covers misuse of service, QoS, illegal practices, provision of service, misleading statements and mobile number portability issues etc.

Flow Chart for filling and handling of Complaints

-     A consumer shall first lodge complaint with the relevant operator through designated call centers, email, operator website, fax etc.;

-     Operators must establish and maintain a comprehensive and responsive complaint handling mechanism and publicise it widely;

-     The operator must address the complaint within 3 working days.

In case the complaint is not redressed by the operator within 3 days:

-    The consumer may file a complaint with PTA through email at complaint@pta.gov.pk or alternatively with the Consumer Protection Directorate, PTA, Islamabad or PTA Zonal Offices in other provinces;

-    The complaint must provide the name/address of the complainant, name of the relevant operator, details of the complaint, proof of previous correspondence with the operator and the relief sought by the complainant;

 -    TA shall issue a unique complaint number and forward the complaint to the concerned operator with instructions to resolve the issue or submit its reply within a timeline specified by PTA;

-     In case the operator redresses the complaint, the operators shall send a redressal report to the complainant as well as PTA;

-     In case the operator does not agree with the complaint, the operator shall submit its reply with the PTA. PTA shall then examine the reply and issue an appropriate order to dispose off the complaint;

-     In case the operator does not submit its required reply, PTA may call the operator and the complainant for a hearing and pass an order.

For further details related to consumer protection you may please contact the author at ahmed@aqlaal.com

 

Case Law Watch

Maintainability of Writ Petition against Interim Order

Lahore H.C, Bahawalpur Bench Judgment in W.P No. 3108/12 dated 2.4.2014

lawMaintainability of Writ Petitions against Interim Orders was in question before the Hon’ble Lahore High Court in the instant case. It was held that where a statute excludes a right of appeal against interim orders, the provisions of the statute could not be by-passed by challenging the same through recourse to constitutional jurisdiction of the High Court. Party effected had to wait till it matured into a final order.

Brief Facts:

The brief facts of the case were that Bank Al-Falah Limited filed a suit for recovery against Petitioners under Section 9 of the Financial Institutions (Recovery of Finances Ordinance, 2001). Banking Court dismissed application for leave to defend the suit under Section 10, of the Ordinance. Aggrieved by the Impugned order present W.P was filed by the Petitioners.

History of Legislation relating to banking loans:

Initially civil Courts were the forum for the settlement of disputes, except some exceptional matters. For speedy disposal of the disputes banking Companies (Recovery of Loans) Ordinance 1978, special banking Courts were established and summary procedure was adopted. Thereafter to provide a machinery for the recovery of finance Banking Tribunals Ordinance 1984 was promulgated. In further development the Banking Companies (Recovery of Loans) Ordinance, 1979 and Banking Tribunals Ordinance 1984, were consolidated and Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997 came into force. Purpose for the enactment was to provide speedy measures for recovery, and lastly 2001 Ordinance was enacted, after making certain modifications in the Act of 1997.

Scope of Financial Institutions (Recovery of Finance Ordinance), 2001:

The Ordinance is a remedial statute. Remedial statutes have been defined by Crawford as those that are enacted in order to improve existing remedies for the redress of wrong or injury. Sub-section 6 of Section 22 of the Ordinance provides that No appeal, review or revisions shall be against an application for leave to defend, or any interlocutory order of the Banking Court, which does not dispose of the entire case. Section 27 of the Ordinance provides that No Court or other authority shall revise or review any proceedings, judgment, decree, order of a Banking Court.

Sub-section 6 of Section 22 of the Ordinance provides that where statute does not provide appeal against interlocutory order, then same cannot be challenged by way of constitutional petition as allowing such an order would amount to negating the provisions of the statute, In Section 27 legislature has referred to Section 22 which reveals the intention of legislation that interlocutory orders passed by the Banking Courts should not be called into question in any proceedings.

Judgements Relied On:

In the Supreme Court Judgement 1996 SCMR 116, it was held that where a statute excludes a right of appeal against interim orders, the provisions of the statute could not be by-passed by challenging the same through recourse to constitutional jurisdiction of the High Court. Party effected had to wait till it matured into a final order.

Similarly in PLD 1985 Lahore 150,  Court held that interlocutory order passed by special Court during the trial of the suit unamenable to appeal/revision, if allowed to be brought under challenge by recourse to extraordinary jurisdiction of the High Court will seriously defeat and deflect clear legislative intent discernible from the provisions of Ordinance.

On above mentioned grounds the Constitutional Petition in the instant case was dismissed.

Are your Preemption Rights in a Private Company truly Protected?

preeption rights picPreemption Rights are the rights provided by the Articles of Association (AoA) to the members of a private company, which restrict strangers/outsiders from becoming a member of a private company and also restrict the existing members from alienating their shares to such strangers/outsiders without the consent of all existing members. These rights are the foundation stone of a private company and a vital distinguishing feature between private and public companies. The rationale behind these rights is to maintain the privacy and control of a private company within given fraternity of members and to prohibit unwelcomed or undesirable persons from joining the company unless they are approved and admitted by all existing members.

With the stirring up of intricacies in all fields of law generally and in corporate law particularly, questions are being raised regarding applicability of Preemption Rights on corporate shareholders of private companies. The question of whether Preemption Rights will be breached where the controlling shares of a corporate shareholder which is a member of another private company are transferred to a person who is undesirable to the existing members of such private company was discussed by the British High Court in McKillen v Misland (Cyprus) Investments Ltd and Others [2012]. 

Brief facts of the case were that Misland (Cyprus) Investment Ltd (Misland), being a corporate shareholder of another legal entity, Coroin Ltd, transferred considerable number of shares to Barclays Brothers which entitled them to take control of affairs of Coroin Ltd. Previous to this, Barclays Brothers offered to purchase shares held by one Mr. McKillen (who was a member of Coroin Ltd) but he rejected the said offer. Thereafter, Barclay Brothers managed to purchase shares of Misland which made them capable of taking control of Coroin Ltd. Mr. McKillen approached the British High Court on the grounds that said transaction was in breach of his Preemption Rights as provided in AoA of Coroin Ltd and Shareholder Agreement signed between its members. Court held that ‘Change of Control’ of Misland (i.e. transfer of shares in Misland to Barclays Brothers)  did not, by itself, trigger the preemption provisions in AoA of Coroin Ltd because Misland remained the actual shareholder of Coroin Ltd throughout.

In light of this judgment, caution needs to be exercised while drafting preemption clauses for private companies. To avoid situations similar to the one in the Misland case, an intelligently drafted Change of Control Clause should be included in the AoA of private companies which restricts the right of transfer of shares in situations where the transfer leads to change of control of company.






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