GSM protest, arbitration in motion

"In our view, the tender documents reflect an intention to discriminate against Centertel in any bidding procedure," said Herbert Hribar, vice president operation at Ameritech International. "It has also become clear over the last few months that the Polish government's policy is to prevent Centertel from obtaining a GSM license."
Ameritech officials said in a statement that the rules give preference to companies that operate independently of the state-owned Telekomunikacja Polska SA, majority shareholder (51%) in Centertel. Ameritech and France Telecom each have 24.5%.
The claim that the tender documentation discriminates against Ameritech investing in a GSM network could give the company the legal foundation to submit the dispute to a binding arbitration. Sources close to the situation said earlier this week that a formal request for arbitration has been made.
In 1990, Poland and the United States signed a bilateral treaty concerning business and economic relations which was ratified last year by the Polish government.
Under the treaty, the Polish and American governments obliged themselves to "accord nondiscriminatory treatment" to nationals and companies of the other party in the conduct of their investment and associated activities in respect to the granting of franchises or rights under licenses.
This means that American investors in Poland may not be treated less favorably than investors of the host country or of third countries.
"It is clear that we are linked to TPSA because of the nature of Centertel," Hribar said. "It is difficult to see how we are to be treated on an equal basis with other hopefuls in the framework of these tender documents."
In the area of dispute settlement, the treaty binds each of the sides to submit an investment dispute for settlement by an arbitral tribunal established under United Nations Commission on International Trade Law (UNCITRAL) rules.
Under these rules, both sides to the dispute will appoint an arbitrator, with these arbitrators then choosing a third. Together they will hear the case and pass a binding judgment in the matter. Ameritech reportedly said it would seek up to $1.5 billion in damages, $750 million from the Communications Ministry and $750 million from TPSA.