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Bolivia wins dispute with Telecom at US court
rahul | July 31, 2008 at 09:31 pmby
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Bolivia wins ruling in Telecom dispute
Fri, 01 Aug 2008 06:24:00
Bolivia has won a US court ruling over USD 36m that Telecom Italia transferred to US banks from its former subsidiary Entel, which was nationalized earlier this year.
Bolivian President Evo Morales announced the government takeover of Entel on May 1, claiming Telecom Italia failed to meet investment commitments and owed the state USD 645m in fines and taxes.
Bolivia's newly formed Nationalization Ministry said the US District Court for the Southern District of New York has ruled that some USD 36m under Entel's name in four bank accounts belongs to Bolivia and not to Telecom Italia.
The ruling forces the banks to turn the money over to Bolivia because the Bolivian state has a majority stake in Entel, the ministry said in a statement.
Last week a British appeals court issued a similar ruling confirming that some USD 49m deposited in a British bank account and claimed by Telecom Italia belongs to Bolivia.
Entel is the largest telecommunications company in Bolivia, commanding 80 percent of the long distance market and 70 percent of mobile telephone services.
Telecom Italia has asked the World Bank to arbitrate in a dispute with Bolivia over compensation for the state takeover.
But Bolivia says that its withdrawal from the World Bank's International Center for Settlement of Investment Disputes (ICSID) last year makes the country immune to the Italian firm's claim.
The nationalization of Entel is part of a drive by President Morales to return to state control key economic sectors.