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Cayman Islands: Net2Phone Loses Legal Suit Against Cable & Wireless

Caymannetnews

01 November 2000

This story is reproduced by kind permission of Caymannetnews at http://www.caymannetnews.com

His Lordship, Justice Henry Graham, has ruled in favour of Cable & Wireless in a civil suit brought before him by the American-based Internet Telephony Provider (ITP), Net2Phone Inc, Silvanus Technologies Limited and Howard Peterson in the Grand Court in the Cayman Islands.

Net2phone claimed that Cable & Wireless had unlawfully interfered with their business when it blocked access to its website and network thereby preventing its customers in the Cayman Islands from using a device known as the 'Yap Jack'. The firm founded its claim on the argument that they were not providing a telecommunications service and as such was not guilty of breaching Cable & Wireless' license to provide national and international systems and services in the Cayman Islands.

Justice Graham rejected this argument on the grounds that the plaintiffs were concerned with the production and marketing of a telephone service that intentionally breached the Cable & Wireless license. His Lordship determined that Cable & Wireless had acted appropriately by blocking access.

However, Mr James Knapp, a vocal opponent of Cable & Wireless' local rates, said: "I don't think we've heard the end of it, " in connection with the impasse between Net2Phone and Cable & Wireless over the blocking of the former's website, thereby impeding the availability of Voice-over-Internet Phone (VoIP) service in the Cayman Islands.

Mr. Knapp of SEGOES Ltd, an established Internet financial trading firm - explaining that he was not a party to the lawsuit - said that his only interest in the matter stemmed from the fact that he thought it was "a terrible thing for Cable & Wireless to have done ... to shut down Net2Phone."

He went on to say: "The fact that they have won one motion doesn't mean a thing. There are any number of bright young lawyers on this island who will be only too willing to file other motions."

Commenting on the outcome of the case, Company Executive Vice-President of Legal and Public Policy, Ms Lisa Agard, said "Cable & Wireless believes that issues of this nature are always better resolved through discussion between the parties concerned without recourse to litigation. We regret that this matter had to be determined by a court of law."

On 15th September Net2Phone and the two local Plaintiffs commenced proceedings against Cable & Wireless (Cayman Islands) Ltd, claiming that Cable & Wireless had unlawfully interfered with their business. Cable & Wireless filed a counter-claim alleging that Net2Phone was inducing its to breach their contracts with the company. The terms of agreement customers have with the company expressly prohibit them from using or accessing any type of Internet telephony from the Cayman Islands.

Cable & Wireless contended that its actions of blocking access to Net2Phone were entirely lawful. The company was seeking to uphold the contracts with customers and protect its rights under the 25-year license granted it by the Government of Cayman Islands. Cable & Wireless also applied to dismiss the Plaintiffs' claim, on the grounds that it had no solid legal foundation.

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