The International Chamber of Commerce (ICC) of Paris has drawn its conclusions on the first phase of the arbitration initiated by Eutelsat Communications (Euronext Paris: ETL) against SES in October 2012.
Eutelsat’s request for arbitration was triggered by the claim by SES of the right to use 500 MHz of bandwidth in the 28.2/28.5° East orbital arc according to an agreement signed between SES and Media Broadcast in 2005 and only disclosed in October 2012. This request is grounded on a breach by SES of the Intersystem Coordination Agreement (ICA) signed with Eutelsat in 1999. The ICA signed by both operators covers use of certain orbital positions in Ku frequency bands over Europe and also favours competition in the satellite communications sector.
As a result of this first phase, the Arbitral Tribunal decided that:
- The ICA does not bar SES from using the disputed bands if and when Eutelsat does not hold the “regulatory” right to operate in these bands;
- SES did agree that Eutelsat would use the disputed bands as long as Eutelsat held the “regulatory” right to operate in these bands.
The Arbitral Tribunal did not decide on whether Eutelsat has the “regulatory” right. Eutelsat firmly believes and can demonstrate it has the “regulatory” right to operate in the disputed frequency bands.
On 30 August 2013, Media Broadcast obtained a preliminary injunction before the Regional Civil Court of Bonn preventing the use by Eutelsat of the disputed frequencies in the event that this creates harmful interference. Eutelsat will appeal this preliminary decision and confirms it does not intend to create harmful interference.
The purpose of the second phase of the arbitration with the ICC is to decide, amongst other issues, whether SES was entitled to sign an agreement in 2005 with Media Broadcast without breaching its obligations under the ICA.
Eutelsat will continue to vigorously defend its right to use the disputed frequencies from 4 October 2013 and to act in the best interests of clients.
As the overall 28.2/28.5° East dispute is ongoing, it is inappropriate to quantify the potential impact on the Group’s outlook provided to the market on 30 July 2013.