Telenor has won another court battle in the US over its Russian investments, but is still in danger of losing the war of attrition that has been raging in the US and Russia for five years.
The case is complex. Telenor is arguing that the cases against it, brought by an off-the-shelf, British Virgin Islands company Farimax, is in fact a tool manipulated by Alfa Group, owned by an oligarchy of Russian billionaires
Alfa complains that Telenor has put its own interests in front of those of other investors who also own stakes in former Soviet Bloc network operators – Russia's Vimpel Communications and Kyivstar of Ukraine.
Alfa is seeking a negotiated settlement, most likely involving a merger of the Russian and Ukrainian holdings into a company jointly controlled by Alfa and Telenor, according to the Wall Street Journal.
Telenor is more inclined to split the holdings, but would consider other options, officials say.
Now a New York judge has that ruled Alfa, which is in danger of being fined tens of millions of dollars in fines for defying the court, had finally complied with rulings in a counter case brought by Telenor involving Kyivstar.
In Russia, The Moscow Arbitration Court put off a decision on whether to suspend enforcement of a $1.7 billion judgment against Telenor which was ruled on in February. Russian bailiffs have already frozen Telenor's 29.9% stake in Vimpelcom, the country’s second biggest mobile network operator in readiness to free up the necessary money to pay the damages. A lawyer for the Bailiffs Service said the agency won't begin the process of selling the shares before a Siberian court takes up Telenor's latest appeal on May 26.
The Norwegian government, Telenor’s main shareholder, has said the judgment is illegal and has appealed to Russian officials to intervene in the dispute.
The court case is likely to have serious ramifications for potential investors in Russia if Telenor is stripped of its investment in Vimplecom.
For some time, it looked as though these legal proceedings could derail Telenor’s Indian ambitions, but at the end of March, it went ahead and paid the first instalment of its $1.2 billion payment for a 67.35% share in Unitech Wireless.