The African Network Information Centre (Afrinic), the primary body overseeing internet resources for Africa and the Indian Ocean region, has been thrust into receivership. This move comes in the wake of a crippling injunction secured by a South African firm in Mauritius’s highest court.

Afrinic’s Role and Current Crisis

Afrinic, as a Regional Internet Registry (RIR), holds the reins to the Internet’s backbone in the region—the Internet Protocol (IP) addresses. The recent decision by the Mauritian Supreme Court has been hailed by industry stakeholders as it paves the way for the restructuring of Afrinic’s beleaguered board and the appointment of a new CEO.

Despite its pivotal role, Afrinic found itself clashing with Mauritius’s corporate governance norms. The organization turned a blind eye to multiple warnings from its member base and the broader community. This nonchalance extended to court judgments, with Afrinic even facing threats of contempt charges.

The Crystal Web Connection

The final nail in the coffin for Afrinic’s board and its CEO position was delivered by Crystal Web. This now-defunct ISP, which once provided DSL and fibre broadband services in South Africa, may have delivered the decisive blow, but it wasn’t the main plaintiff. Afrinic has been embroiled in over 55 court cases since June 2020.

The Heart of the Matter: Cloud Innovation and IP Addresses

At the epicenter of this legal maelstrom is Cloud Innovation and its founder, Lu Heng. Lu’s other venture, an IP brokerage named Larus Limited, is also intricately linked to this saga.

Between 2013 and 2016, Afrinic allocated a whopping 6.3 million IP version 4 (IPv4) addresses to Cloud Innovation. To understand the gravity, imagine these IP addresses as vast tracts of untouched internet real estate. Over these years, Cloud Innovation received four substantial blocks.

With the global scarcity of IPv4 addresses, the allocations to Cloud Innovation have skyrocketed in value. Current market rates suggest an IP address can fetch around $50.

However, the legitimacy of Afrinic’s allocation to Cloud Innovation is under scrutiny. While some insiders vouch for the transparency of Cloud Innovation’s application, others hint at possible misrepresentation during the application process.

Afrinic Placed Under Receivership

On 15 March 2023, Afrinic, Africa’s Internet registry, was presented with legal papers pushing for its placement under receivership. After multiple hearings throughout September, the Supreme Court of Mauritius delivered a judgment in favour of Cloud Innovation.

In a dramatic turn, Afrinic’s legal representative was removed from the court proceedings, citing Crystal Web’s prior injunction that questioned the legitimacy of the representative’s appointment. Consequently, the hearing proceeded without Afrinic’s lawyers.

The court’s ruling mandates:

1. Afrinic cannot relocate, merge, restructure, or undergo any changes in management control.
2. The appointed receiver is to ensure the preservation of Afrinic’s assets and uphold the business’s value.
3. The receiver is also responsible for overseeing elections per Afrinic’s constitution, forming a legitimate board, and appointing a CEO.
4. Elections must be held within six months from 12 September 2023, with provisions for extensions if necessary.

Both Cloud Innovation and Crystal Web expressed approval of the ruling. Cloud Innovation emphasized the fairness of the judgment and pledged support for Afrinic’s staff and members.

The Number Resource Organization (NRO) has also welcomed the recent developments, stating: “With successful execution, these developments will restore AFRINIC to functional governance with the election of an Executive Board and appointment of a CEO. These developments will further allow AFRINIC to continue to function with stability and certainty as the African continent’s Regional Internet Registry and also to resume its full participation in the NRO.”

As of now, Afrinic and the Official Receiver, Vasoodayven Virasami, have not commented on the situation.