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Motorola Begins Enforcement of Approximately $2.5 Billion Arbitration Award against Telsim
Successfully Attaches Telsim’s International Roaming and Interconnect Revenues
Schaumburg, Ill., August 4, 2005 – Motorola, Inc. (NYSE: MOT) announced that the company has successfully taken steps to enforce its approximately $2.5 billion arbitration award against the Turkish cellular phone operator, Telsim Mobil Telekomunikasyon (“Telsim”).
On June 13, 2005, a panel of arbitrators from the Zurich Chamber of Commerce issued a final award (“the Final Award”) in the arbitration pending between Telsim and Motorola Credit Corporation (“MCC”) concerning the amounts due by Telsim to MCC under the financing arrangements between the parties. Telsim had borrowed nearly $2.0 billion from Motorola for the financing of a Motorola-constructed cellular telephone system and has failed to pay Motorola despite the system’s operational success. It has been reported that the system now has approximately 8 million subscribers and is the second largest operator in Turkey. The arbitral panel rejected Telsim’s defenses and, after three years of contested proceedings, issued an award now worth approximately $2.5 billion (including interest) in Motorola’s favor against Telsim; however, Telsim has continued to refuse to pay Motorola.
On June 27, 2005, the Supreme Court of the Canton of Zurich, Switzerland confirmed that Telsim had not sought to appeal the award, with the effect that the award is final and enforceable.
As a result, Motorola has begun to enforce the Final Award worldwide. By August 3, 2005, courts in the United States and the United Kingdom granted Motorola’s request to attach the international roaming and interconnect revenues Telsim has earned in those countries. International roaming allows mobile phone users to make calls and utilize other services while they are traveling outside their home country. International interconnect services allow land-line callers to connect with mobile phone users in other countries. As the result of the decisions from the U.S. and U.K. courts, Motorola will be able to attach and/or freeze the monies other carriers would have otherwise paid to Telsim for international roaming and interconnect services.
Because Motorola’s claim is not against the carriers, this order will not affect in any way international roaming and interconnect services – it will also be cost neutral.
As previously announced, Motorola is continuing aggressively to enforce the judgment for $2.13 billion rendered on behalf of Motorola against the Uzan family of Turkey for perpetrating a massive fraud against Motorola relating to the Telsim loans. As previously announced, the United States Supreme Court denied the Uzans’ petition for a writ of certiorari with respect to this judgment on May 16, 2005, thereby ending all the Uzan’s rights to further appeal of the judgment rendered by Judge Rakoff of the United States District Court for the Southern District of New York.
About Motorola
Motorola is a Fortune 100 global communications leader that provides seamless mobility products and solutions across broadband, embedded systems and wireless networks. In your home, auto, workplace, and all spaces in between, seamless mobility means you can reach the people, things and information you need, anywhere, anytime. Seamless mobility harnesses the power of technology convergence and enables smarter, faster, cost-effective and flexible communication. Motorola had sales of US $31.3 billion in 2004. For more information: www.motorola.com.
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Media Contact:
Jennifer Weyrauch
+1-847-435-5320
Jennifer.weyrauch@motorola.com
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