Giant vs Government disputes in the telecoms sector – how to be ready

Giant vs Government disputes in the telecoms sector – how to be ready


Legal disputes are anathema to a growing company, diverting capital to legal expenses and possibly resulting in sizeable monetary awards being lost, or contracts overturned.

However, many disputes can be handled quickly and comprehensively – as long as the correct procedures are in place ahead of time. We examine what you can do to manage a dispute – whether you are a smaller wholesaler or major player.

Growth often leads to complex and high-value disputes and, particularly in emerging markets, the telecoms sector grows apace – with the onset of 5G connectivity likely to result in yet more expansion in the market. One recent example is the first-ever decision by a five-member ICC tribunal to award a Portuguese telecoms company over $650 million in a dispute with fellow shareholders in Angola’s largest telco.

Preparation is key

The first step is to ensure familiarity with the contracts which your company is party to. Identify risks early and costly disputes can be avoided or mitigated. Proactively considering your contracts will be far more beneficial than revisiting them after a claim is issued.

A pre-emptive review by in-house and/or outside counsel not involved in the drafting may be worthwhile to identify risks not previously considered and for advice on how potential claims may best be approached.

How are your documents managed?

It is too late to develop a document retention policy after a dispute arises. Always anticipate a dispute, and act accordingly:

  • identify those involved in a deal and ensure relevant communications/documents are preserved and easily accessible;

  • ensure that relevant employees have an ongoing obligation to assist with evidence after they leave;

  • think before firing employees with knowledge of the dispute – they may switch sides;

  • keep records of oral communications.

Once a dispute looms, usual document retention policies must be suspended and all relevant documents preserved, including meeting notes, notes of telephone calls, etc. If you are unsure, consult in-house and external counsel.

Restrict communications to persons in the company likely to be covered by litigation privilege. Be careful with board minutes, as these are unlikely to be privileged per se.

[Co-author: Julia Kalinina Belcher, counsel, Pillsbury Winthrop Shaw Pittman]

Handle with care

Review your position properly before responding substantively to your opponent(s) and always think how your communications will be perceived by a judge or arbitrator:

  • consider the value of the relationship and act accordingly to de-escalate (negotiations, mediation);

  • consider limiting those who are authorised to respond to your opponent(s) to a small number of people, to ensure consistency;

  • consider which communications should be made on a “without prejudice” basis;

  • remember that, under English law, an innocent party cannot recover for losses it could have avoided – consider taking steps to limit losses.

Where do you stand?

If a dispute seems imminent, before filing your claim it’s important to ask yourself:

  • have you satisfied contractual pre-dispute requirements?

  • are there assets to satisfy your judgment/award? If so, where are they located? If there is a risk of dissipation before the judgment or award, what can you do about it?

  • do you need other urgent interim relief? If so, where do you get it and what do you need to show?

  • if pursuing arbitration, consider the possible early relief available from the courts of the seat of the arbitration before the tribunal is formed, and what the relevant test is;

  • if seeking an injunction, are you prepared to pay the price (undertaking in damages, bank guarantee, etc.)?


[Co-author: Charles H. Golsong, senior associate, Pillsbury Winthrop Shaw Pittman]

What about bilateral investment treaties (BITs)?

Be mindful of potential disputes even in contractual negotiations. If states are involved (often the case in the telecoms sector), consider:

  • structuring transactions to benefit from BITs;

  • recent developments such as the Achmea decision, where the ECJ held that arbitrating claims under intra-EU BITs is inconsistent with EU law, and the January 2019 decision by all 28 EU member states to terminate all existing BITs – structure or re-structure accordingly;

  • consider how best to protect your company against expropriation, unfair treatment etc. by the host state or state companies – take advantage of most favourable nation clauses, umbrella clauses and widely drafted BITs;

  • consider waivers of sovereign immunity, both in respect of jurisdiction and enforcement (note that legislation in countries of enforcement will also be relevant);

  • include a choice of law other than that of the host state, and a jurisdiction clause which will take you outside the courts of the host state.

No aspect of the telecoms industry is free of risk, and that includes the risk of a corporate dispute. Bearing these guidelines in mind is your best bet to handling a dispute swiftly and with minimum damage.

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