State locked in argument with FT over Cellis

24 Feb 2005

Lebanon’s telecommunications minister Jean Louis Qordahi says he plans to contest an international arbitration decision demanding that the country pay USD266 million to France Télécom (FT) for the premature termination of its contract with mobile operator Cellis. According to The Daily Star newspaper the cellco, which was owned by FT and the Lebanese Mikati group, became embroiled in a long-running legal dispute over alleged violations of its build-operate-transfer (BOT) contract signed with the government in 1993. The international arbitrator in Geneva dismissed the government’s claim for USD300 million from Cellis for 19 alleged breaches in the BOT contract, and instead ordered Lebanon to pay USD266 million for its unilateral decision to terminate the contract early. The French heavyweight original petitioned for USD1 billion from the state for breaking the terms of the deal and for tarnishing its reputation. Mr Qordahi plans to appeal the decision in the Higher Swiss Federal Court, but legal experts broadly agree that Lebanon will most likely have to pay FT at the end of the day. In an attempt to downplay the situation Qordahi said that Cellis (now operating under the banner Alfa) was now generating significantly higher revenues than the disputed USD266 million, since it was transferred to the government two years ago.

Lebanon, Alfa (MIC 1)