Russia’s MTS has settled a long running dispute over the ownership of a mobile network operator in the Kyrgyz Republic and is to receive a payment of US$150 million to settle the case.
The agreement covers matters involving a number of parties and legal proceedings, including those in the Isle of Man, London, Luxembourg and the Seychelles.
Russia’s MTS has been fighting Altimo for control of the Kyrgyzstan based mobile network, Bitel ever since a series of complex transactions were carried out in 2005.
The background to the case is that MTS’s subsidiary company, MTS Finance acquired a 51% stake in Tarino Limited from Nomihold Securities at the end of 2005. At the time, Tarino was believed to be the indirect owner, through its 100% owned subsidiaries, of Bitel, a Kyrgyzstan based mobile network operator.
However, three days after the deal was announced, a little-known Russian company, Rezervspetsmet, which reportedly has links with Russia’s Altimo, challenged the purchase in court and was awarded full operating control over Bitel. At some point in September-October 2006, under Rezervspetsmet’s control, Bitel transferred all its assets to Kyrgyzstan’s Sky Mobile, which was acquired by Altimo in June.
MTS now says that a settlement has been reached with both Altimo and Nomihold Securities. As part of the settlement, MTS shall receive a total payment up to $150 million, including an amount of $125 million which has been received by MTS.
They will now work to close down the various legal disputes that stretch across a number of countries, including the UK’s Court of International Arbitration.