Published On: Fri, Sep 15th, 2023

TelEm loses appeal against Israeli telecom giant

PHILIPSBURG — Telecom operator TelEm has lost its appeal against a decision that orders the company to pay MER St. Maarten BV, a subsidiary of the Israeli MER Group $561.905 and – after the presentation of invoices another $2.67 million. So far, MER has not produced invoices and TelEm therefore refuses to pay.

The appeals court for civil affairs handled the dispute between the two companies on May 16 and concluded that there is no reason to suspend the execution of the decision to pay.

The relationship between MER and TelEm goes back to June 30, 2017, when parties signed an agreement for the construction of a fiber optic network. The value of the contract was a bit over 28.1 million guilders or $15.7 million.

Two years down the road there was a dispute about the termination of the contract. TelEm informed MER about the termination in a letter dated October 17, 2010. MER went to the International Court of Arbitration of the International Chamber of Commerce (ICC), demanding payment for work in progress as well as compensation.

On January 20, 2022, the ICC granted MER an Award, stating that TelEm had wrongfully terminated the agreement. The Award ordered TelEm to pay $561,904.80 and, after presentation of invoices, $2,671,522.38. TelEm was also ordered to pay the costs of the arbitration and legal costs for a total of $513,311.

MER asked TelEm on March 25, 2022, to abide voluntarily by the ruling, but the company refused. Instead, TelEm initiated a procedure to void the arbitration ruling on May 13.

The appeals court ruled that TelEm’s appeal against the ruling is in vain because according to the UNCITRAL Model Law on International Commercial Arbitration, an arbitration award is binding.

There are no grounds to refuse the execution of the award, the court ruled, adding that it sees no reason to suspend its execution or to attach the condition of security to it.


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