Cyprus court upholds Telsim interim order

— 16 European telcos told to block roaming income

 

A Cyprus court has denied a request made by Turkish telecom giant Telsim Mobil requesting the cancellation of an interim order blocking the roaming income that it claims from 16 European telecom companies.

Last year, the Nicosia District Court had granted an interim order blocking the roaming income of Telsim until the Turkish company settled the USD 738 mln claim against it by Cyprus-based Rosamara Trading Ltd.

The law firm of Michael Michaelides, representing the interests of Rosamara Trading Ltd., had won court approval ordering Telsim from transferring, leasing or mortgaging its assets.

The interim order also ordered Telsim from collecting or demanding payment of any sums of money up to US 738 mln generated from SMS, international, GPRS, voice mail and roaming revenues from up to 16 telecom companies operating in the EU, including most Vodafone subsidiaries.

The fact that the Nicosia court denied the application by the Cyprus lawyers of Telsim to dismiss the interim order is significant because of its political and financial dimensions.

 

— Politics come to play

 

Michaelides told the Financial Mirror that the case has political implications since Turkey will have to defend its interests in a Cyprus court. Turkey refuses to recognise the Republic of Cyprus and if it decides to defend itself, then it will be seen as a tacit recognition.

“Following the court decision, I have instructed the 16 European telecom companies to abide by the decision and continue to block the roaming income of Telsim,” he said.

As reported earlier by the Financial Mirror, Rosamara sued Telsim in a Cyprus court demanding full payment on over USD 738 mln in bearer promissory notes that were issued by Telsim in 2003. The notes matured in 2006 and are secured by the assets and roaming income of Telsim, Turkey’s second largest mobile phone operator.

Telsim’s operations were taken over by Turkey’s state deposit insurance fund (SDIF) in 2004, after the bonds were issued and entered on the corporate books.

The SDIF conducted a public auction of Telsim’s assets and received bids from telecom groups in Europe, the Middle East and Russia. The winning bid of USD 4.5 bln was submitted by British telecom giant Vodafone.