Uzbekistan, MTS stop hearings in international arbitration

Business Materials 19 November 2014 11:41 (UTC +04:00)

Tashkent, Uzbekistan, Nov.19

By Demir Azizov- Trend:

International Center for Settlement of Investment Disputes (ICSID) stopped arbitral trial between Mobile Telesystems (MTS) OJSC and Uzbekistan at the joint request of the parties, the press service of MTS.

MTS and Uzbekistan signed an amicable agreement on the settlement of mutual claims, providing for the establishment of a new mobile JV Universal Mobile Systems (UMS) July 31, 2014.

It was reported that the share of Mobile TeleSystems (MTS) OJSC in the JV accounts for 50.01 percent, and the remaining 49.99 percent belongs to a state-owned Center for radio broadcasting and television unitary enterprise at the Uzbek State Committee for Communication, Informatization and Telecommunication Technologies (SCCITT).

Universal Mobile Systems received 2G/3G/LTE licenses, a required frequency range, number capacity (2.5 million numbers) and other permits for work as well as guarantee of return and safety of investments.

The launch of the UMS network into commercial use in Uzbekistan is scheduled for Dec. 1, 2014.

It was earlier reported that in 2012, Uzdunrobita LLC, the leading operator in the Uzbek market with a customer base of 9.3 million subscribers, has been deprived of licenses.

In January 2013, Uzdunrobita filed for bankruptcy amid widespread claims by the Uzbek authorities. Tashkent Economic Court declared the company bankrupt, by filing liquidation proceedings against it. But the auctions on sale of assets were invalidated due to a lack of bids.

In late 2013, the property of Uzdunrobita was transferred to the custody of Uzbektelecom JSC.

This summer, MTS and Uzbekistan signed a settlement agreement, under which the company must resume activity to provide mobile services throughout the territory of the country within the framework of a joint venture with participation of the state.

The settlement agreement is governed by English law and provides for resolution of any disputes arising out of the settlement agreement in the International Court of Arbitration under International Chamber of Commerce in Paris (ICC).

Uzbekistan currently has four mobile operators - Unitel LLC (subsidiary of the Russian VimpelCom), Coscom LLC (subsidiary of the Scandinavian TeliaSonera), JV Rubicon Wireless Communications (RWC, Perfectum Mobile trademark) and Uzbektelekom Mobile (Uzmobile).

In February, 2014 Uzbekistan decided to establish a national mobile operator on the basis of the Uzbektelecom - Uzmobile branch. It will work in the GSM standard by using the LTE technology (network of fourth-generation 4G).