Michael Bleby Reporter

Michael writes on emerging markets, architecture and engineering. He has served as a correspondent in Tokyo, London and Johannesburg and has written for Reuters, the Financial Times, The Age and The Sydney Morning Herald.

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Kogan’s ispONE spat turns into long-haul court fight

Published 24 April 2013 14:59, Updated 01 May 2013 13:30

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The battle between retail entrepreneur Ruslan Kogan’s mobile phone business and its wholesale reseller ispONE will return to the Victorian Supreme Court next week after the two sides failed to settle their differences in court-mediated talks on Tuesday.

The return to court on Monday will lengthen a matter that was originally seen as a one-day trial, but could stretch to as many as four days after ispONE, which provides access to the Telstra mobile network for Kogan Mobile customers, made a counter claim against the retailer alleging breach of contract.

For an online business like Kogan that relies heavily on the image of its owner and satisfaction of customers to keep them loyal, any extra court delay and the uncertainty that brings increases the risks to the business.

Kogan brought the original case against ispONE after it suspended 622 Kogan Mobile customers, citing overuse of the data service, without seeking Kogan’s permission to do so. Earlier this month, the retailer, which says its brand and image have been damaged by ispONE’s actions, won an injunction reversing the suspension of those accounts pending a resolution of their larger disputes.

When they returned to court last week in what was expected to a be a one-day trial based on documents, ispONE in turn accused Kogan Mobile of breaching its contractual obligations by failing to enforce rules against overuse by its customers. With mediation failing to resolve the issues, the court battle will resume.

Kogan Mobile’s counsel Norman O’Bryan SC last week called ispONE’s move an “offensive tactic.” ispONE said new material it had received from Kogan Mobile exposed wider issues in the case.

Much of the dispute has come about because of a loosely drafted wholesale agreement between the two sides. The two sides cannot agree on what constitutes ‘”excessive” use of access to the network or even the procedure for suspending accounts deemed to be using it excessively.

Meanwhile Kogan Mobile’s original injunction that keeps the 622 accounts active – despite ispONE’s argument that this would cost it – remains in place.

Neither side would comment on Wednesday.

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