Vivendi: Deutsche Tekecom Must Return PTC Stake To Telco

PARIS -(Dow Jones)- French media company Vivendi said Tuesday the Austrian Supreme Court rejected Deutsche Telekom and Elektrim Telekomunikacja's interpretation of an arbitration award regarding the ownership of Polska Telefonia Cyfrowia.

On Dec. 18, the Austrian Supreme Court delivered a final judgment in the dispute between Vivendi's Telco and Deutsche Telecom and Elektrim over an arbitration award issued in Austria in 2004.

In its ruling, the Austrian Supreme court confirmed that Elektrim Telekomunikajca, or Telco, was not a party to that arbitration, which was between Deutsche Telekom and Elektrim alone, "and that therefore the arbitration award dated Nov. 26, 2004, could not affect Telco's rights," Vivendi said.

"Thus Telco's ownership of 48% of PTC cannot be challenged on the basis of the Vienna arbitration," Vivendi said.

"Deutsche Telekom, which claims to be the owner of the 48% stake in PTC, is now therefore obliged to return it to Telco without delay," Vivendi also said.

However, Deutsche Telekom Tuesday rejected Vivendi's interpretation of the Austrian Supreme Court's ruling.

A spokesman for Deutsche Telekom said that, in fact, Vivendi's third and final attempt to annul the Vienna arbitration court ruling of November 2004, has failed yet again.

"So the position of Deutsche Telekom in PTC has been confirmed," spokesman Andreas Leigers said, adding that the final ruling of the supreme court also included the provision that Vivendi pay for the legal costs of all three annulment attempts.

According to Vivendi, "By bringing their dispute before the Vienna arbitration tribunal, DT and Elektrim undertook that they would abide by and apply in good faith the judgment of the tribunal and its final interpretation by the Austrian Supreme Court."

Vivendi, Deutsche Telekom and Polish conglomerate Elektrim have been in a dispute over ownership of PTC for several years and have brought multiple suits against each other in Austria, Poland, and most recently in the U.S.

Deutsche Telekom claims that in 2004 the Austrian arbitration court found that the 48% stake in PTC that Vivendi claims to own via a joint venture with Elekrim dubbed "Telco" is in fact owned by Elektrim.

PTC is the largest mobile operator in Poland in terms of number of subscribers and Deutsche Telekom claims 97% ownership of the company.

Deutsche Telekom bases its claim to the company on a deal to purchase 48% of PTC from Polish conglomerate Elektrim.

In late October, Vivendi tried to circumvent the litigation by offering Deutsche Telekom EUR2.5 billion for its direct 49% stake in PTC.

Deutsche Telekom said it would consolidate its majority shareholding in telecommunications company Polska Telefonia Cyfrowy on its own balance sheet from the beginning of November.

Company Web sites: http://www.vivendi.com;

http://www.telekom.de

-By Mimosa Spencer and Geraldine Amiel, Dow Jones Newswires; +331 40171740; mimosa.spencer@dowjones.com

(Joon Knapen in Berlin contributed to this article.)

(END) Dow Jones Newswires"

Posted to the site on 9th January 2007