Egypt's Orascom Telecom (OT)has said it plans to lodge an appeal against a 26 October Damascus court ruling ordering it to hand over its share in GSM operator Syriatelto its local partner and pay the equivalent of $20 million in damages. The two partners have been locked in dispute since the start of the year. OT on 3 October obtained a ruling from the British Virgin Islands (BVI) high court for a freeze injunction up to the value of $57 million on the worldwide assets of Drex Technologies, controlled by the principal Syrian partner in the GSM venture, Rami Makhlouf (MEED 11:10:02; Telecoms, MEED Special Report, 16:8:02, page 27).
The Damascus court ordered the revocation of the 720,000 Syriatel shares from the name of OT and their re-registration in the name of Rami Makhlouf, Syriatel said in a statement. It also ordered OT to pay $20 million to Makhlouf in compensation. The court found that OT had been in breach of its contract with Drex and Makhlouf, Syriatel said.
OT has consistently rejected its Syrian partners' claims and has intimated that Makhlouf's goal has been to secure overall control of the venture. The Egyptian firm has also raised questions about the conduct of the Syrian courts in the affair.
It is understood that the contracts between the two parties do not provide for any resort to arbitration.
OT in May sold most of its stake in Syriatel to BVI-registered operator Cylotel. However that deal has been blocked by Syrian courts. The Drex stake in Syriatel has also been sold, to Ramak, a local company controlled by Makhlouf family interests.
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