Vivendi Wins Battle in Ongoing War Over Ownership of Polish Mobile Network

­France's Vivendi has announced that the Warsaw Court of Appeals has denied the request of Deutsche Telekom and Elektrim for the recognition in the Republic of Poland of the arbitral award rendered in Vienna in November 2004, confirming the position of Elektrim Telekomunikacja (Telco), as a 51% Vivendi subsidairy.

The companies have been battling over control of the Polish mobile network operator since the beginning of 2000, after Deutsche Telekom disputed an agreement reached in 1999 where Vivendi and Elektrim formed the joint venture, Elektrim Telekomunikacja through which Vivendi invested around EUR 2 billion.

Vivendi noted in a statement that after the Austrian Supreme Court, this decision marks another and significant victory for Vivendi in its dispute with DT and Elektrim over its investment in the Polish telecom operator PTC.

As claimed by Vivendi since 2004 and contrary to the assertions of DT and Elektrim, the Warsaw Court of Appeals affirmed that the arbitral award has no effect on Telco's 48% ownership of PTC. DT and Elektrim had misused the arbitral award for years as false justification to lay claim to control those PTC shares and to exclude Telco out of PTC. This decision confirms that DT and Elektrim cannot claim Telco's 48% ownership on the basis of the arbitral award.

Vivendi is a 51% shareholder in Telco and Carcom, which own, either directly or indirectly, 51% of PTC, one of the primary mobile telephone operator in Poland.

Earlier this year, an arbitral tribunal under the auspices of the London Court of International Arbitration (LCIA) awarded damages of US$2.4 billion - plus accrued interest from February 2005 - to Vivendi for intentional breaches by Elektrim of the investment agreement regarding their joint venture Elektrim Telekomunikacja (Telco) and their investment in Polska Telefonia Cyfrowa (PTC).

Posted to the site on 29th September 2009