Eircell, the Telecom Eireann subsidiary, has "nothing whatever" against service provider Meridian Communications Ltd, the High Court heard yesterday.

Mr Claude Kinsella, head of corporate sales at Eircell, rejected claims by Meridian that his company was intent on putting the smaller company rival out of business.

An affidavit from Mr Kinsella was read to the court on the second day of an application by Meridian and its subsidiary, Cellular 3 Telecommunications Ltd, for orders restraining Eircell from terminating in November a Volume Discount Agreement (VDA) with Meridian and directing Eircell to operate the agreement in a fair and proper manner pending the outcome of proceedings between the companies.

Meridian also wants declarations that Eircell is abusing its dominant position in the market and damages for alleged breach of contract, injurious falsehood and inducement to breach of contract.

In his affidavit, Mr Kinsella said it was absurd to equate Eircell's 60 per cent GSM market share with a "dominant position".

When Meridian signed its VDA with Eircell in August 1997, it had some 40 phones in its rental fleet, he said. It was materially misleading for Meridian to claim it was now operating the same business, although at larger volume.

Mr Kinsella said Eircell's legal advisers had told him that Eircell was and is entitled not to renew the VDA with Meridian.

The hearing before Miss Justice Carroll resumes on Tuesday.