AIS unfazed by tribunal's TOT ruling

AIS unfazed by tribunal's TOT ruling

Advanced Info Service (AIS) has brushed aside concerns about an arbitration tribunal's ruling ordering it to pay 31 billion baht in compensation to TOT Plc over a dispute in their mobile service agreement amendments almost 20 years ago.

An executive at AIS who requested anonymity said the ruling will have no bearing on the firm's financial status or plans for the 5G spectrum licence auction scheduled for Feb 16, as the ruling by the tribunal is not obligatory.

There is no need for the firm to set aside a provision for such a payment.

"The two parties are most likely to continue the legal fight in the central and supreme administrative courts, respectively, a process that could take at least five years," the executive said.

The source said AIS will argue in court hearings that the amendments were not incorrect.

In the dispute, TOT argued that the amendments in May 2001 with regard to the reduction of revenue share in prepaid service and in September 2002 concerning the deduction of roaming expense resulted in the loss of benefit to TOT compared with the main service agreement.

TOT claimed an additional payment of 62.8 billion baht in relation to the two amendments.

The dispute was brought by AIS and TOT to the Arbitration Institute in September and November 2015.

The arbitration tribunal on Jan 29 ordered AIS to pay 31.07 billion baht plus interest of 1.25% per month starting from Nov 30, 2015 to TOT.

AIS on Jan 29 issued a statement to the Stock Exchange of Thailand, expressing disagreement with the tribunal's ruling.

"We are proceeding to submit the case for Central Administrative Court review for the revocation of the arbitration tribunal's award within 90 days after receiving the award," AIS said.

AIS insisted that the ruling does not affect the company's financial status, liquidity or ability to service debt, since the decision is not final and the firm will proceed with further legal action.

Pisut Ngamvijitvong, a senior analyst at Kasikorn Securities, said a long journey for the two parties remains ahead in the courts as they tussle over additional benefits gained by AIS after the amendment.

Total Access Communication (DTAC) and True Move also have concessions with CAT Telecom amended in the same way, Mr Pisut said. This could be a challenge for the consideration of whether the three operators have to make payments to state telecoms in the future, he said.

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