The arbitration panel has announced its judgment in relation to the disputed SAR 2.2 billion($586 million) 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 ($58 million), amounting to less than 10% of Mobily’s claim.
Hassan Kabbani, CEO of Zain Saudi Arabia said: “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 added: “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.”
The arbitration proceedings commenced in December 2014 following a formal claim by Mobily for SAR 2.2 billion($586 million) 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.