Encrypted traffic dropped?

I have recently installed SimpLite-MSN software (http://www.secway.fr/us/products/simplite_msn/) to encrypt my IM messages. For this software to work, it requires both the sender and receipient to both have this software installed and running during the IM session. SimpLite behaves as a proxy so MSN Messenger talks to SimpLite locally and SimpLite will exchange traffics with the MSN network. How this works is that public keys of both parties are exchanged for authentication purposes and the IM messages are encrypted with symmetric AES 128 bit encryption.
I convinced friends to start using this software to encrypt all our chats. Only one friend (located in UAE) has problems when using SimpLite. We are able to exchange public keys but subsequently after that, that friend is not able to send or receive IM messages. Seems that his ISP is able to recognise that the packets that are being exchanged are encrypted and dropped accordingly because he is able to resume using MSN Messenger only after turning off SimpLite.
Is my hypothesis correct? If yes, would anyone hazard a guess how the ISP is doing so?