Last Friday an arbitration panel of the International Court of Arbitration of the International Chamber of Commerce issued a ruling in the long-running arbitration proceedings between Hutchison International Limited ("HIL") and Hutchison 3G Italia and CIRtel International, a minority shareholder in Hutchison 3G Italia.
The ruling confirms and vindicates the position of HIL and Hutchison 3G Italia on the fundamental issue in dispute, namely that CIRtel has a continuing obligation to provide funding to Hutchison 3G Italia in accordance with its commitments in the shareholders agreement.
The Court determined in its ruling that CIRtel has an ongoing obligation to provide funding for its US$494 million contribution to Hutchison 3G Italia's 3G licence cost and that CIRtel is entitled to repayment of its two loans to Hutchison 3G Italia in the sum of US$494 million and US$7.9 million plus interest thereon from 1 December 2001 at 4.7% per annum, without prejudice to its continuing funding obligation under the shareholders agreement.
The Hutchison 3G Italia Board of Directors has the right and power under the shareholders agreement to call on CIRtel to continue to provide funding in the sum of US$494 million for the 3G licence cost, which CIRtel must immediately provide pursuant to its irrevocable funding commitment given in the shareholders agreement; and US$7.9 million for working capital purposes, which CIRtel may opt out of but with a possible consequential dilution of its interest in Hutchison 3G Italia.
HIL and Hutchison 3G Italia say that they are very pleased with the ruling.
The Board of H3G Italia will meet shortly to consider the manner of exercise of its right to call on CIRtel for funding of its share of the Licence Cost of EUR367.3 million and EUR5.9 million for working capital purposes, as well as the corresponding repayment of CIRtel's outstanding loans in accordance with the ruling."
Posted to the site on 7th December 2004
Posted to: www.cellular-news.com/story/11384.php