Salt gets nod to subpoena Liberty chairman, CEO over Sunrise spat

Swiss operator Salt Mobile has been given the go-ahead by a US court to subpoena Liberty Global chairman John Malone and CEO Michael Fries.

Any subsequent findings will help Salt decide whether to sue for damages it claims to have suffered when Liberty agreed in August to merge its Swiss business UPC with Sunrise.

“We are pleased that the court ruled on our application swiftly, given the important and urgent nature of this case. We look forward to the receipt of information that will shed further light on Sunrise’s unlawful actions in recent months,” said Salt, in a statement on Tuesday.

At the route of the row is the May agreement between Salt and Sunrise to form a 50:50 joint venture called Swiss Open Fiber (SOF). The JV will spend CHF 3 billion to deploy FTTP to 1.5 million premises over the next seven years in a bid to compete with incumbent Swisscom.

In legal documents submitted late last month, Salt alleges that under its agreement with Sunrise, both parties agreed on an exclusivity period preventing either from engaging in takeover talks during its duration. Salt claims it was agreed that notification of intent to terminate the exclusivity period could not be given by either side before 9 October.

Salt claims Liberty Global later made contact with it over a possible tie-up with UPC. However, Salt says it sent Liberty packing because it was bound by its exclusivity period with Sunrise.

However, according to Salt, Sunrise was only too happy to breach the terms of their JV agreement when Liberty came calling.

“Sunrise’s actions endanger the viability of the SOF,” continued Salt, in its legal filing. “Upon information and belief, Sunrise has stated that it had decided to pause all efforts and works in connection with Swiss Open Fiber.”

Salt argues that the combination of the alleged breach by Sunrise of the exclusivity period and the pause on Swiss Open Fiber’s plans – coupled with Salt’s claim to have rejected an approach by Liberty that would have led to a nice payday for Salt’s parent NJJ Telecom – means that it has suffered “significant harm and damages in the billions of Swiss Francs.”

Sunrise CEO André Krause insisted in a recent Financial Timesreport that the exclusivity period with Salt is voided if Sunrise becomes the subject of a public tender offer – an offer he claims Sunrise did not solicit.

Clearly that is not how Salt sees it, so unless a settlement is reached, at this rate it looks like it will be up to a Swiss court to decide.