6/13/2006

Vivendi: Telecommunications in Poland

Elektrim has announced that an arbitrationtribunal has authorized Deutsche Telekom to exercise a purchase optionin respect of 48% of PTC, the Polish mobile telephone operator.
1. This award has apparently been handed down in the context of an
arbitration between Deutsche Telekom and Elektrim under a
shareholders' agreement to which neither Vivendi nor Elektrim
Telekomunikacja (Telco) are parties.
In any event, it could not have any impact on Telco's ownership of
the PTC shares that Elektrim claims to own following the
arbitration award dated November 26, 2004, which is unenforceable
against Telco, and the recognition of which by the Court of Appeal
on March 29, 2006 had no effect on its application.

2. This purchase option could only be exercised in respect of the
shares owned by Elektrim, namely a single PTC share. The 48% of
PTC transferred to Telco in 1999 is not subject to this purchase
option, because it is not owned by Elektrim.

3. On December 20, 2005 the Commercial Court in Vienna, at first
instance, set aside the part of the award dated November 26, 2004
that declared the transfer of the PTC shares to Telco ineffective.
It unambiguously confirmed our interpretation of the award, which
is not enforceable against Telco.
Telco had no obligation pursuant to this arbitration to which it
was not a party, and the allegations of Elektrim are unfounded.
The Warsaw Court of Appeals' recognition on March 29, 2006 of the
arbitration award dated November 26, 2004 did not take this
decision of the Commercial Court into account, and will be the
subject of a further appeal.

4. The assertions made by Elektrim according to which DT owns 97%
of PTC are therefore groundless and constitute an infringement of
Telco's property rights.

Source:



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