ATCO Clearwire Telecom Limited (ACT) yesterday filed a lawsuit in the High Court of the Kingdom of Bahrain against the Telecommunications Regulatory Authority (TRA) to (1) request a restraining order to prevent or freeze the TRA’s award of National Fixed Wireless Service (NFWS) licenses to the two announced winners, and (2) declare that ACT is entitled, by proper application of the auction rules and the law, to be one of the two highest bidders with valid financial bids and, hence, entitled to one of the NFWS licenses.
ACT’s lawsuit stipulates that the TRA failed to follow its legally binding auction rules pursuant to the TRA’s Invitation to Tender (ITT); available at www.tra.org.bh/en/pdf/ITT_amended_final.pdf.
On December 13, 2006, the TRA opened the financial bids of the six qualified bidders and read them out publicly. After opening the financial bids, the TRA was required to take the following steps:
1. Assess the validity of each financial bid to see if it meets all requirements spelled out in the ITT;
2. Announce the list of bidders who met all of the ITT’s requirements for a valid financial bid, together with their bid prices; and
3. Award NFWS licenses to the bidders who offered the two highest valid financial bids.
ACT states that neither one of the two announced winners offered valid financial bids, as defined in the ITT, and, hence, should have been disqualified by the TRA pursuant to the rules. ACT claims that, by not following the ITT, the TRA violated Bahraini law. The Bahraini Telecommunications Law only allows the award of a NFWS license if all conditions of the ITT are met. ACT adds that the ITT rules are clear and precise and apply a strict standard for qualifying a bid as a valid financial bid; a bidder either meets all of the requirements, or does not at all. ACT has met with and written to the TRA requesting it to reconsider its decision. The TRA has refused. Therefore, ACT states that it had no other option but to pursue a legal action.
According to the ITT, the auction rules are binding and prevent the TRA from modifying the rules after the bid submission date. ACT stipulates that as the bids of the two announced winners failed to meet the requirements for a valid financial bid, the TRA, by law, could not ignore or modify the ITT rules to award the NFWS licenses to those companies. ACT sees no other possible interpretation of the Telecommunications Law or auction rules.
ACT states that it is confident that the rule of law will prevail in Bahrain because the Kingdom has gained international renown for its economic liberalization and transparency, notwithstanding the TRA’s actions in this case now at issue.
