Polish telecoms company plans challenge to partial award in favour of DPTG | Practical Law

Polish telecoms company plans challenge to partial award in favour of DPTG | Practical Law

Wojciech Sadowski (Of Counsel), K&L Gates, Warsaw

Polish telecoms company plans challenge to partial award in favour of DPTG

Practical Law Legal Update 0-503-4373 (Approx. 2 pages)

Polish telecoms company plans challenge to partial award in favour of DPTG

Published on 28 Sep 2010International
Wojciech Sadowski (Of Counsel), K&L Gates, Warsaw
On 3 September 2010, an UNCITRAL arbitral tribunal in Vienna rendered a partial award in a long-lasting dispute between Telekomunikacja Polska, a leading Polish telecoms company (controlled by France Telecom), and Danish Polish Telecommunications Group (DPTG) (controlled by GN Store Nord in 75% and 25% of TDC).
The proceedings were initiated in 2001, in a dispute over the settlement of fees due to DPTG under a contract for the sale and installation of a fiber optic system called the North-South Link (NSL) running from Poland's southern frontier to Koszalin in the north.
The ad hoc tribunal constituted in accordance with the UNCITRAL Arbitration Rules ruled in favour of DPTG and ordered Telekomunikacja Polska to pay to its Danish business partner the total amount of approximately €396 million, including €270 million of the principal amount and €126 million in interest and costs. The partial award settled the dispute with respect to the period from February 1994 to June 2004. It is understood that the dispute remains pending with respect to the amounts due after June 2004.
In its official statement of 3 September 2010, Telekomunikacja Polska, which is listed on the Warsaw Stock Exchange, announced that it is considering legal remedies aimed at challenging the award. On 17 September 2010, the last day when Telekomunikacja Polska was obliged to comply with the partial award according to its terms, Telekomunikacja Polska reaffirmed its willingness to challenge the award and oppose enforcement. DPTG announced that it will take action aimed at recovering the amount awarded. Therefore, it is conceivable that the dispute will not end anytime soon. Telekomunikacja Polska has until 3 December 2010 to challenge the award before the Austrian courts.