Orange opened a legal case against the Iraqi government claiming investments it made totalling $400 million was expropriated by the country’s Communications and Media Commission.
Financial Times (FT) reported the French operator had been in discussion with the Iraqi government for months to resolve an ownership issue, surrounding investment in the country’s third-largest operator Korek.
Orange launched arbitration proceedings with the International Center for Settlement of Investment Disputes, an arm of the World Bank.
Kuwaiti logistics company Agility also launched a separate case against Korek, the company also invested in the operator.
Orange and Agility jointly bought a 44 per cent stake in Korek for $810 million in 2011, and agreed a separate option to eventually take a majority share in the operator.
In 2013, Iraq’s communications regulator issued warning letters to Orange and Agility for a series of unmet measures including coverage targets and a potential IPO, resulting in controlling shares handed to local investors and no compensation paid.
Korek was launched by prominent Kurdish businessman Sirwan Barzani, who is also first cousin president of the Kurdistan region Nechirvan Barzani, noted the FT.
Orange said in a statement to the FT: “This is part of Orange’s consistent and determined efforts to defend its rights in this matter to obtain an equitable indemnification for its investment.”
