The International Chamber of Commerce’s (ICC’s) International Court of Arbitration has awarded US$1.65 billion in damages to Iraq Telecom Limited (ITL) and International Holdings.
The ruling is the latest twist in a long-running case that dates back to March 2011, when ITL – a joint venture between Orange Group and Kuwaiti logistics company Agility – obtained a 44% holding in Kurdistan-based Korek Telecom after receiving approvals from Iraq’s Communications and Media Commission (CMC).
In late 2011, Korek took out a US$150 million loan from Lebanon’s IBL Bank, and neglected to inform ITL or either of its parent firms of this move. In 2014, the CMC annulled the acquisition of the holding in Korek, and in 2019 it expropriated the holding entirely. Agility and Orange issued legal challenges against the confiscation in domestic and international courts, with CommsUpdate reporting that several of the associated lawsuits are ongoing.
The partners accused Korek Telecom and its controlling stakeholder Sirwan Barzani of corruption and fraud, alleging that millions of dollars of company funds had been embezzled and mismanaged. The ICA has found the accused parties liable for these charges, and accordingly ruled in favour of awarding damages to ITL and International Holdings, an affiliate of Agility.
Agility Vice Chairman Tarek Sultan said: “We hope that this outcome brings resolution and closure to the issue and that the respondents will now honour their obligations in a manner commensurate with that of businesses operating in countries that respect the rule of law.”
A statement from Korek Telecom read: "Mr. Barzani and Korek firmly deny the allegations against them and are considering all options, including whether to seek to set aside the [Tribunal's] Award. Korek is disappointed by these findings. This is not the end of the matter, and the company vigorously rejects any allegation that it set out to deceive ITL.”
