US Federal Court confirms Telenor's Arbitration Award against Alfa and Orders Alfa to Comply with Award

Press release
5 minute read
(Fornebu, Norway; Kyiv, Ukraine; and New York, New York - 5 November 2007) The US Federal Court for the Southern District of New York on Friday 2 November granted Telenor's petition for enforcement of its final arbitration award against the Russian Alfa Group subsidiary Storm. The Court denied Storm's motion to vacate the award and ordered Storm to comply with the award.

The US Court has confirmed that Storm must either sell its stake in Ukrainian mobile operator Kyivstar or Altimo, Alfa's telecom arm must dispose of stakes higher than five per cent in competing wireless operators Turkcell/Astelit and Ukrainian High Technologies within 120 days of the date of the award. The award also requires Storm and its Alfa affiliates to begin attending Kyivstar board and shareholder meetings, to withdraw their various lawsuits in Ukraine and to cease filing additional lawsuits in Ukraine.

In the conclusion to his 64 page decision, Judge Gerard E. Lynch of the Southern District of New York said:

"Storm and its corporate owners deliberately entered a carefully-negotiated agreement with Telenor. Central to the bargain was an arbitration clause providing for the resolution of disputes in a fair, neutral international arbitration forum. Storm provided every conceivable assurance to Telenor that its signatory officers were empowered to bind it to that agreement. When Storm breached the agreement, it was provided with precisely the fair and impartial hearing it had bargained for, by a distinguished panel of arbitrators, despite making repeated efforts to renege on its agreement and to torpedo the proceedings by collusive and vexatious litigation. The arbitral Tribunal carefully considered Storm's every argument, and by unanimous vote- including the vote of the arbitrator Storm itself had appointed - decisively rejected those arguments, and correctly awarded appropriate relief to Telenor. Accordingly, for the foregoing reasons, Storm's motion is denied, and Telenor's petition for enforcement of the Final Award is granted. Storm is hereby ordered to comply with the directives of the Final Award."

"This decision shows that Alfa must respect the agreements they negotiate and sign," said Telenor's Executive Vice President and Head of Central and Eastern Europe, Jan Edvard Thygesen. "With this clear US court confirmation we will continue to secure our rights in accordance with our plans and pursue all our legal options in enforcing this award in other jurisdictions, including, for example, the UK. It is only a matter of time before Alfa will be forced to comply with this award and the Court's order, so we strongly urge Alfa to withdraw all their collusive lawsuits in Ukraine and refrain from starting new ones.

"This court decision should serve as a demonstration to any future Alfa/Altimo business partners, proving that they show lacking respect for internationally established business practices and ethics," continued Mr. Thygesen.

Alfa Group and its subsidiaries, including Altimo, are controlled by Mikhail Fridman.

A complete copy of the Court's decision can be found here

Further information:

Dag Melgaard, Vice President Group Communications, Telenor ASA
tel: +47 901 92 000, e-mail:

Anna Ivanova-Galitsina, PR and Communications Director, Telenor Russia AS
tel: +7903 680 0033, e-mail:

Anastasiya Sosevych, PR and Communications Director, Telenor Ukraine
tel: + 380674676666, e-mail: