RIGA - The Paris-based International Court of Arbitration last week upheld the settlement reached between the state of Latvia and TeliaSonera over the dispute involving the monopoly rights of Lattelekom and investments by the operator's strategic investors, the Clifford Chance legal firm has reported.
The government and Scandinavian telecommunications giant TeliaSonera, which owns 49 percent of Lattelekom through Tilts Communications, reached a settlement on March 3, with both sides dropping claims that had gotten bogged down in international arbitration courts.
The Paris-based court's ruling came just one week after Prime Minister Indulis Emsis asked Economy Minister Juris Lujans to examine the legality of the deal, which was initiated by former Prime Minister Einars Repse in December and pushed through before he stepped down from head of the Cabinet in the beginning of March.
According to the settlement, TeliaSonera will pay Latvia 1 million lats (1.5 million euros) in compensation for litigation expenses and 9 million lats more should the state decide upon the further privatization of both Lattelekom and mobile operator LMT in favor of TeliaSonera.
The deal came under a wave of criticism at home, as many top officials, including Emsis, suspected Repse of having rammed the deal through "at any cost" during his last days as head of government.
Parliament adopted a resolution saying that the deal was contrary to state interests and resembled "robbery of the state."
Emsis said on April 5 that discussions with Clifford Chance had failed to convince him that the settlement suited the interests of the state, and that he therefore wanted an inquiry into the settlement.
Lujans, who will oversee the inquiry, is a member of Latvia's First Party, which pulled out of the Repse-led government coalition in February and has since exchanged bitter words with New Era, the party Repse leads.
The prime minister said he believed that the settlement agreement and related documents should be declassified even though Clifford Chance lawyers had warned him that making these documents public could result in other international court cases against Latvia.
Emsis' spokesperson reported on April 8 that the state still remained 2.9 million British pounds (4.1 million euros) in debt to Clifford Chance for representing Latvia in the case, but that Emsis had previously been told that all debts to the law office had been paid off.
The matter will be discussed at an upcoming Cabinet meeting, the spokesperson said.
The Latvian state holds 51 percent in Lattelekom.
