Chief of Telenor Representative Office in Ukraine, Sigmund Ekhougen and Alfa Group lawyer Alexei Reznikov, backward
Photo: Vladislav Sodel
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Ukraine Infringed U.S. Laws
Norwegian Telenor has lost another battle against Alfa Group for control over Ukrainian cellular operator Kyivstar. Well-known outside Ukraine, the Pechersky Court of Kiev, has refused to recognize the award of New York International Commercial Arbitration that upheld Telenor August 1, 2007. This refusal of Ukrainian court may draw the country into an international trial under the Washington Convention on the Settlement of Investment Disputes.
The Pechersky District Court of Kiev refused October 5 to recognize and put into effect the award of New York International Commercial Arbitration that ruled August 1 that Storm had violated the agreement of Kyivstar holders.
Telenor owns 56.5 percent in Kyivstar, while Storm (that is controlled by Alfa Group’s Altimo) has 43.5 percent in it via two offshore firms. The procedures for Kyivstar management are spelled out in the agreement that Telenor and Storm concluded January 30, 2004. Pursuant to that agreement, all disputes of the parties should be referred to the International Commercial Arbitration in New York and settled under the U.S. laws.
The conflict of Altimo and Telenor sparkled in August 2005, once Storm attempted to expand in Kyivstar BOD. For this purpose, Storm challenged Telenor’s right to nominate five of nine directors and to put forward the GD candidacy. Claiming that provision of Kyivstar Charter breaches Ukrainian legislation, Altimo initiated a few trials in the state courts of Ukraine and won the better part of them.
In the spring of 2006, a court in Ukraine invalidated the holders’ agreement of Telenor and Storm, along with the arbitration clause about referring all disputes to the Arbitration in New York. Predictably, Telenor went to the U.S. courts and was upheld there.
www.kommersant.com
All the Article in Russian as of Oct. 24, 2007
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