Government Again Sues ArmenTel’s Greek Owner

YEREVAN (RFE/RL)–The Armenian government has taken another court action against the Greek owner of Armenia’s telecommunication monopoly for its alleged failure to honor investment obligations–Justice Minister David Harutiunian said on Thursday.

He told RFE/RL that the government filed a lawsuit to the International Court of Arbitration in London on March 2 and expects a compensation from the Hellenic Telecommunications Organization for breaching terms of its 1998 takeover of ArmenTel.

OTE was supposed to invest $100 million in Armenia’s telephone network by March 3–the second anniversary of the biggest yet acquisition of an Armenian company. Officials in Yerevan claim that OTE has not even spent a third of that sum on upgrading the network’s aging equipment.

The lawsuit followed fruitless talks in London last week between Harutiunian and senior Greek executives. OTE rejected Armenian deman’s to amend the $205 million deal to specify and toughen sanctions in case of its violation.

Harutiunian did not reveal how much in compensatory damages the government seeks to obtain. Last September OTE pledged to pay $8.2 million to the government in an out-of-court settlement of a tax dispute.

ArmenTel’s privatization had sparked a controversy in Armenia two years ago–with opposition parties unsuccessfully trying to reverse it. They in particularly objected to 15-year exclusive rights on the Armenian market of telecommunications granted to OTE.

The ArmenTel monopoly is one of the remaining obstacles to Armenia’s membership in the World Trade Organization.


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