Teleco Seeks $240 Million Settlement from Haitel
Haitel became Haiti's original mobile phone system in 1998. In a licensing agreement, worth $14.5 million, Haitel received authorization to use Les Telecommunications d'Haiti's (Teleco) radio frequency band for a period of 15 years. Under the agreement Teleco and Haitel were to resolve any disagreements in a Haitian court.
Matters became complicated when the parties signed a second agreement in 1998, in which Haitel held shares in escrow as collateral to secure its debt to Teleco. An arbitration clause specified the two firms seek arbitration for any conflicts.
The trouble began when Teleco said Haitel made use of the frequency band from 1998 to 2007, but stopped paying licensing fees. Teleco demanded Haitel honor its debt under the licensing agreement. Haitel said it owed Teleco just $4.8 million under the shareholder agreement, and it would be paid in stocks, not cash.
Teleco insists the shareholders agreement is not valid because no evidence exists Teleco's board of directors ever authorized the general manager to mediate or sign the shareholder's agreement. U.S. District Judge Jack Weinstein agreed in a ruling he made on the case.
Teleco is suing Haitel for $240 million for licensing agreement fees Haitel defaulted on from 1998 to 2007 Haitel wants to go to arbitration, but has forfeited its rights according to Haitian law by being involved in protracted legal proceedings in Haiti.
Currently Teleco's legal action against Haitel is awaiting a ruling from Haiti's High Court, while Haitel is in bankruptcy proceedings.« Previous · Next »