Vivendi Awarded $2.44 Billion in Polish Phone Company Dispute

France's Vivendi has announced that on 12th February, an arbitral tribunal under the auspices of the London Court of International Arbitration (LCIA) issued its final award in the dispute between Vivendi and Elektrim, a Polish company controlled by Mr. Zygmunt Solorz.

The tribunal awarded damages of €1.876 billion (US$2.44 billion) -plus accrued interest from February 2005 - to Vivendi for intentional breaches by Elektrim of the investment agreement entered into in September 2001 regarding their joint venture Elektrim Telekomunikacja (Telco) and their investment in Polska Telefonia Cyfrowa (PTC).

This final award follows a partial award rendered on 19 March 2008 which declared that "Elektrim breached the basic premise of the [investment agreement] by systematically acting against the interests of Telco in furtherance of its own interests and by refusing to acknowledge Telco's right to the economic benefit of the PTC shares". All of Elektrim's counterclaims against Vivendi have been dismissed.

Elektrim had received more than €1.8 billion from Vivendi to transfer the PTC shares to Telco and protect Telco's economic interests therein. Vivendi is the largest creditor of Elektrim and this final award confirms its claim, of which recognition is requested in Elektrim's bankruptcy.

The confirmation of Telco's ownership rights on the PTC shares is still pending before the Polish courts.

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.

Posted to the site on 24th February 2009