Court injunction: The High Court has granted an interim injunction to Smart Mobile Ltd restraining the communications regulator from awarding the fourth 3G licence to any other company.

Smart Mobile Ltd had gone to court after it was notified this week by ComReg that the offer for the fourth 3G licence had been withdrawn.

The 3G licence provides for a minimum of 53 per cent network coverage to be achieved by 2011. Vodafone, O2 and 3 Ireland hold the existing licences.

On the application of Michael Cush SC yesterday afternoon on behalf of Smart, Ms Justice Mary Laffoy granted the interim order and made it returnable to tomorrow .

The judge said she was satisfied that there was a fair issue to be tried between the sides.

Because of the background to the application - including extensive correspondence between the sides - she indicated that there should be a speedy return date.

As a consequence of the order, the regulator is restrained from awarding the licence to any other party pending a further order of the High Court.

Outlining the case, Mr Cush said that the regulator had, in a letter to the company on Monday last, said that Smart Mobile Ltd had failed to provide a performance bond in the form acceptable by the regulator.

As a result of the failure to make this provision it was not awarding the company the 3G licence, the letter stated.

The court heard that the EU €100 million performance-related bond had to be lodged with the regulator by close of business on January 30th last.

Moreover, it also heard that the draft performance guarantees from three leading commercial banks, who are underwriting the guarantees, were forwarded to the regulator.

According to an affidavit by Ciarán Casey, chief operations officer with Smart Mobile, there was a level of communication between the parties as to the terms of the performance bonds up to January 27th last.

Smart believed that the draft performance guarantees furnished to the regulator reflected what Smart understood would be acceptable.

However, the regulator had made significant extra requirements in relation to the terms of the performance related bonds over that weekend of January 27th.

Mr Casey said Smart had had no opportunity to meet these concerns, particularly having regard to the fact that one of the proffered banks was a Chinese bank which was closed at the time for the Chinese new year.

Given a reasonable opportunity, Smart could meet ComReg's concerns or indeed provide appropriate alternative arrangements agreeable to the regulator, he said.

While it might be unrealistic to think the regulator was in a position to award the licence to any other company at this point, Smart did not know that and had therefore brought the injunction application, Mr Cush said.