Telenor to appeal USD1.7bn damages ruling

23 Feb 2009

Norway’s Telenor says it will appeal a Russian court decision ordering the telecoms group to pay USD1.7 billion in damages to British Virgin Islands-based investment group Farimex for delaying the takeover of a Ukrainian mobile operator in 2005. Farimex, which holds a tiny stake in Russian cellular operator Vimpelcom, alleges that Telenor – which is one of Vimpelcom’s largest shareholders alongside Russia’s Alfa group – slowed the cellco’s purchase of Ukrainian Radio Systems (URS, now rebranded Beeline) by a year. Telenor holds 29.9% of voting shares in Vimpelcom, which owns 100% of URS. A Telenor spokesperson said that the company considered last Friday’s decision of the Omsk appeals court to be ‘unlawful and groundless.’ The amount of damages in the claim has been reduced following last month’s ruling by the Eighth Arbitrazh Appellate Court that Telenor was not liable for a claim of USD2.8 billion from Farimex which had been upheld by the Khanty-Mansiysk Arbitration Court in August 2008. Farimex owns just 0.002% of Vimpelcom’s shares, but Telenor alleges Alfa Group, which owns 44% of Vimpelcom, is backing the obscure plaintiff, as part of an ongoing battle to gain control of Telenor’s stake in the Russian cellco. Alfa has denied any connection with the off-shore firm.