On Thursday, November 10 2016 the arbitration panel announced their judgment in relation to the disputed SAR 2.2 billion claim by Etihad Etisalat ("Mobily") from Mobile Telecommunication Company Saudi Arabia ("Zain") arising from the services agreement signed between the two parties on May 6, 2008.

The arbitration panel allocated Mobily SAR 219,464,509, amounting to less than 10% of Mobily's claim.

Hassan Kabbani, CEO of Zain Saudi Arabia commented: "I trust that this judgement brings to an end this legacy issue that has overshadowed both companies, and indeed the entire telecommunications sector in the Kingdom. Throughout the arbitration proceedings we have acknowledged that Zain owed Mobily a modest amount. As Zain maintained adequate financial provision to cover this amount, I can confirm that the judgement amount of SAR 219 million will have no additional impact on the Company's net earnings."

He continued: "I would like to thank our team of legal advisors, technical experts, accounting experts and of course the team at Zain for their support over the last two years."

Kabbani concludes: "Telecommunications by its nature is one of the most interconnected industries in the world. As a sector, we all need to put this legacy matter behind us and focus on achieving the strategic objectives of Vision 2030 for the benefit of the Kingdom and all consumers."

Zain Saudi Arabia highlights the professionalism and transparency of the Riyadh Chamber of Commerce's new commercial arbitration guidelines, which greatly contribute to maintaining the confidence and trust in the Kingdom's business environment.

The arbitration proceedings commenced in December 2014 following a formal claim by Mobily for SAR 2.2 billion from Zain.

Zain rejected the claim, stating that it arose from Mobily's unilateral revocation of amendments to the 2008 Services Agreement, agreed between the parties.

Etihad Etisalat Mobily signed a strategic partnership agreement with Ooredoo; the leader telecom operator in Qatar, to cooperate together in international data services, the matter which enhances collaboration and added value for both parties.

As per this agreement, each party offers a range of leading international data services such as International Private Leased Circuit (IPLC) services, IPLC Transit services, Global Multi-Protocol Label Switching (MPLS) services, MPLS Transit services and IP Transit services.

The agreement provides an added value for both parties, especially in strengthening the business relationship with data services partners and the international linking for the two companies. Furthermore, the agreement enables Mobily of the border link with Qatar through the largest operator in this country, which contributes to accelerate data transfer process between the two countries.

This agreement contributes to mobily's large presence in the launch of regional and international connectivity services provided in collaboration with international partners through its highly reliable world-class infrastructure.

Digital Magazine

Dec 2016

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