Major AFRINIC court ruling
The Supreme Court of Mauritius has dismissed an appeal brought by former Afrinic director Benjamin Eshun, once again placing it in receivership. It also ordered that the official receiver hold board elections within two months.
The African Network Information Centre (Afrinic) is the continent’s Regional Internet Registry (RIR). It is responsible for the raw Internet resources, like Internet Protocol addresses, for the entire African continent and Indian Ocean region.
This latest ruling comes after the Mauritian Supreme Court placed Afrinic under receivership in September last year, with the receiver directed to hold elections within six months.
However, Eshun lodged an appeal on behalf of Afrinic on 28 September 2023 to overturn the Supreme Court’s decision, effectively staying the receiver until the matter was heard.
Behind the scenes, there was a flurry of further legal action between Eshun (as Afrinic) and Cloud Innovation, the other party in the litigation.
Cloud Innovation attempted to prevent the appeal from blocking the receiver’s appointment. However, it failed, and the receiver was blocked until Eshun’s appeal could be heard in October 2024.
Industry players on both sides of a conflict — including those who disagree with Cloud Innovation’s main complaint against Afrinic — were dismayed by the delay.
They had welcomed Afrinic being placed under receivership last year, as it potentially created a path to reconstitute the ailing entity’s board and appoint a CEO.
Afrinic was left headless and rudderless by a barrage of legal action from Cloud Innovation and its allies when the RIR tried to revoke Cloud Innovation’s Internet Protocol (IP) address resources.
Among Afrinic’s allegations was that Cloud Innovation was no longer using its substantial allocation of valuable Internet resources for what it said it would when it applied for them.
Cloud Innovation holds 6,291,456 IP version 4 addresses in the Afrinic region spread across four allocations.
IP brokers are selling IPv4 addresses for $25 to $50 each. This values Cloud Innovation’s holdings at a minimum of $157,286,400 (R2.8 billion).
Amazon Web Services introduced a fee for public IPv4 addresses in February of $0.005 per hour, which amounts to $43.80 or roughly R780 per year.
Internet connectivity requires that both servers and users have access to an IP address.
While there are complex mechanisms allowing addresses to be shared, generally speaking, every home or business connection is assigned an address, and every Internet server has a unique address.
Since the number of IPv4 addresses is limited, they have become increasingly valuable as the amount of free space has depleted.
Therefore, when Afrinic tried to seize Cloud Innovation’s Internet resources in 2021 for allegedly violating its Registration Service Agreement, it predictably fought back.
Cloud Innovation denied violating its agreement with Afrinic and obtained an injunction blocking the registry from revoking its membership.
It also launched a claim for damages and obtained a garnishee order that it could enforce “at own risk and perils” to effectively freeze Afrinic’s bank account.
This left Afrinic scrambling to arrange ways to pay salaries and other basic running costs.
More than two months later, it convinced the courts to grant access to its funds so it could continue to operate during the legal action.
The legal battles against Afrinic continued into 2023 when a one-two punch of injunctions left the registry paralysed.
The first came from Cloud Innovation and blocked Afrinic from holding elections to appoint directors to vacant or soon-to-be vacant board seats.
Afrinic is a member-based organisation that appoints directors through elections rather than a more traditional recruitment process.
Cloud Innovation’s injunction came after a nasty electioneering process during which it and its affiliates were accused of trying to buy votes.
Court documents filed in a Tanzanian defamation case include a sworn statement from Flashnet CEO Vinayan Benedict in which he said he was offered $3,000 (R52,500) for access to his Afrinic account.
The individual making the offer explained that they would use Benedict’s account to vote for their preferred candidate in the upcoming Afrinic elections.
According to the evidence Benedict submitted, the offer was made via email by an individual who worked at Larus Limited, an IP broker.
Although Larus operates arms-length from Cloud Innovation, the companies are intertwined and share the same founder and CEO.
The defamation case against Benedict was dismissed with costs earlier this year for lack of evidence.
Cloud Innovation has denied allegations of vote-buying and accused the Afrinic board of trying to rig the election by blocking its preferred candidates from even getting on the ballot.
Citing procedural issues with how the Afrinic board’s nominations committee excluded candidates from the elections, Cloud Innovation won an interdict blocking them from proceeding.
Unable to hold elections, the terms of several board members expired.
This opened the door for a second injunction and the final paralysing blow, struck by defunct South African Internet service provider Crystal Web.
Crystal Web’s injunction effectively confirmed that Afrinic doesn’t have a properly constituted board and, therefore, has no way to make many important decisions.
Former Afrinic CEO Eddy Kayihura then approached the court to appoint a temporary board from a list of candidates provided by the African Telecommunications Union.
However, this motion was also opposed, with detractors arguing that it was just another attempt by a group with vested interests and a particular agenda to retain control of Afrinic.
As the board members’ terms expired, the organisation was left with insufficient directors to reach a quorum during meetings.
When Kayihura’s term as CEO expired, his contract was not renewed.
There was a dispute about whether Kayihura’s contract could be renewed given the inquorate board, which ultimately resulted in him stepping aside rather than forcing the issue.
Crystal Web cofounder Paul Hjul said that following their interdict, they sought the court’s appointment of directors with the limited power to convene a meeting of resource members.
“Afrinic’s management, for no rational reason or consideration for the best interests of the organisation, opposed and frustrated the latter action,” Hjul previously told MyBroadband.
This ultimately led to Cloud Innovation’s application to have Afrinic placed under receivership in March 2023.
The matter was heard in September 2023, with the Mauritian Supreme Court ruling in favour of Cloud Innovation.
Despite the court ruling that Afrinic did not have a quorate board and could not even appoint attorneys, Eshun launched an appeal against the receiver’s appointment.
Predictably, the court has now ruled that Eshun was not empowered to launch the appeal because it could only be authorised by a resolution of a properly constituted board.
It also ruled that Eshun was no longer a director of Afrinic as he had been appointed on 18 September 2020, and his three-year term had expired when the organisation couldn’t hold its annual general members’ meeting.
Whereas the previous order placing Afrinic under receivership had given the official receiver six months to hold elections, the Supreme Court said these must now be held as a matter of utmost urgency.
It gave the receiver two months from 15 October 2024 to hold the elections.
Hjul welcomed the ruling.
“It brings to an end one avenue of delay to getting Afrinic into a state of following the law and acting as a members organisation that promotes a stable and free Internet within Africa,” he said.
Eshun did not respond to a request for comment.
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