Broadband wholesaler to fight Sydney telco over costly court ruling

Broadband wholesaler to fight Sydney telco over costly court ruling

Fresh appeal set to hit court in August

Satellite broadband service wholesaler, IPSTAR Australia, has moved to fight a decision by the NSW Supreme Court ruling that it pay internet service provider, APS Satellite (formerly known as SkyMesh), millions of dollars over allegedly faulty equipment.

The satellite telecommunications provider, which is a wholly-owned subsidiary of Thai satellite operator, Thaicom, has applied to appeal the decision handed down by the court on 22 December.

The case, which was heard by NSW Supreme Court judge, Justice Nigel Rein, saw the broadband wholesaler ordered to pay SkyMesh millions of dollars over a number of claims made against it by the local ISP.

Now, following its application for appeal, it is understood that IPSTAR Australia’s fresh action is set to be heard in the NSW Supreme Court in August. It remains to be seen, however, whether the company will be granted leave to pursue its appeal any further.

SkyMesh originally made three legal claims against IPSTAR Australia arising out of the commercial relationship between the two companies, which saw the local ISP use the Thai company’s satellite infrastructure to provide broadband access in rural and regional Australia.

IPSTAR imported equipment into Australia that was intended to enable customers to connect to its satellite network. That equipment was sold by IPSTAR to SkyBridge, which sold it on to SkyMesh, who then sold it to end consumers.

It should be noted that SkyMesh and SkyBridge are unrelated companies.

In the initial case between the two companies, which was heard in the NSW Supreme Court last year, SkyMesh alleged that the equipment was defective, not of merchantable quality and not fit for the purpose for which customers required the equipment, according to court documents.

The “defective goods claim” against IPSTAR was worth around $2.2 million.

Further, SkyMesh claimed that, because of the very high number of consumer calls and complaints it received from the allegedly faulty equipment, it was required to increase its support staff at considerable expense. This secondary claim was valued at $750,000.

At the same time, SkyMesh contended that the $2,933 per Mbps that was imposed upon it by the broadband wholesaler should have been no more than $2,500 per Mbps, under the circumstances, which allegedly translated to an overpayment to IPSTAR, on SkyMesh’s claim, of $3.4 million.

Ultimately, the judge presiding over the case ruled that SkyMesh was entitled to just over $1.8 million from IPSTAR over the defective goods claim, and around $3.4 million over the unconscionability claim.

“I therefore conclude that Ipstar acted unconscionably in requiring SkyMesh to meet an obligation that Ipstar was required by statute to meet itself,” Justice Rein said in his December ruling. “It should be required to refund to SkyMesh the amount so extracted being an amount of $3.4 million.”

It should be noted that, at this stage, it is not yet clear which of the rulings IPSTAR Australia is appealing against, or if, indeed, it is appealing against all of the court's rulings on the matter. 

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Tags broadbandlegalTelcosatelliteipstarSkyMesh

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