SOURCE: Telenor

June 23, 2008 10:07 ET

Telenor Takes Action to Stop Farimex's Russian Lawsuit

FORNEBU, NORWAY, MOSCOW, RUSSIA and NEW YORK, NY--(Marketwire - June 23, 2008) - Telenor has requested the US Federal District Court in New York to stop Farimex from pursuing a lawsuit against Telenor in Khanty-Mansiysk in Russia. On Friday, 20 June, Telenor filed a lawsuit against Alfa Group affiliates Farimex Products, Inc., Altimo Holdings & Investments and Eco Telecom, requesting the Court to compel Farimex to arbitrate its claim in an arbitration proceeding commenced by Eco Telecom in March 2008.

"Farimex is controlled by Alfa, and its claim is just another one of Alfa's collusive lawsuits," said Dag Melgaard, Vice President Telenor Group Communications. "Farimex's only director is Dmitry Fridman, Mikhail Fridman's first cousin. Dmitry Fridman signed the power of attorney that authorized Farimex's lawsuit. The only evidence produced by Farimex for its holding of ADRs in VimpelCom is a letter from Alfa Capital Holdings (Cyprus) Ltd., and many of the documents that were attached to Farimex's claim can only have come from Alfa or VimpelCom."

Farimex filed a 3.8 billion USD claim against Telenor in a remote court in Siberia less than one month after Eco Telecom started a 1 billion USD arbitration proceeding in Geneva, Switzerland under the VimpelCom Shareholders Agreement. The Eco Telecom arbitration claim is essentially identical to the claim filed by Farimex. Both Farimex and Eco Telecom allege that Telenor's nominees on VimpelCom's Board delayed VimpelCom's acquisition of loss-making Ukrainian mobile operator Ukrainian Radio System and thereby harmed VimpelCom. In addition to naming Telenor as a defendant, Farimex also named Eco Telecom, Altimo and other Alfa Group entities as defendants. Telenor believes this was done in order to link the case to Khanty-Mansiysk where one of the Alfa Group parties has its registered office and to create an appearance of independence on the part of Farimex.

"Eco Telecom is bound by the VimpelCom Shareholders Agreement to arbitrate any claims it may have against Telenor in Geneva under the UNCITRAL Arbitration Rules," said Melgaard. "Having started an arbitration in Geneva in March, Alfa cannot now use its alter ego Farimex to pursue the same claim in a remote court in Siberia. We have seen Alfa attempt to litigate through proxies in Ukraine and Russia. This appears to be a key part of their strategy."

The Telenor entity named as a defendant in the Farimex claim is Telenor East Invest AS, which has no presence in Russia and, to date, has not been served with notice of Farimex's claim in accordance with the international treaty that governs service of process in such cases.

Telenor's complaint alleges that Farimex is funded by a 4 billion USD offshore trust created by Alfa Group Supervisory Board Chairman Mikhail Fridman for the purpose of pursuing litigation and corporate raiding in circumstances where it is advantageous for the relevant entity to appear to be outside Alfa's control.

Copyright © Hugin AS 2008. All rights reserved.

Contact Information

  • Further information:

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