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Telecom TPSA sees no impact of DPTG lawsuit's fine on dividend policy

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Date: 2010-09-06 08:31

The country's landline telecom incumbent TPSA does not plan any changes to its investment strategy or dividend policy following an arbitration decision granting an equivalent of PLN 1,568mn (EUR 396mn) to Danish Polish Telecommunications Group (DPTG), the firm has announced.


In advance, TPSA made a provision for this lawsuit. However, it now admitted that the amount arising from the arbitration decision exceeded its total provision by around PLN 467mn . The Polish telecom also said that it was presently evaluating the possible legal actions to challenge the Vienna Arbitration Tribunal's decision and its enforceability.

The dispute arose in 2001 with respect to a contract concluded in 1991 by TPSA's legal predecessor, the then state-owned enterprise Poczta Polska Telegraf i Telefon, with DPTG (currently owned as to 75% by GN Nord and 25% by TDC), over the interpretation of a contract for the sale and installation by DPTG of a fibre-optic system known as North-South Link (NSL).

The contract provided for payment of part of the contract price (around EUR 17mn) by allocating to DPTG 14.8% of certain revenue from the NSL over a period of 15 years from February, 1994 to January 2009. In 1999, the parties came to a disagreement regarding the calculations of the revenue. In 2001, DPTG filed ad hoc arbitration proceedings before the Arbitration Tribunal in Vienna.

ISB, tom