01 Nov, 2012

The Technology and Communications group at Charles Russell LLP has successfully advised the Telecommunications Regulatory Authority (TRA) in a case which is the first of its kind in the history of arbitration in the Kingdom of Bahrain. This is the first ever statutory arbitration between the TRA and a licensed telecommunications operator to be adjudicated upon in the Kingdom of Bahrain since the liberalisation of the telecommunications sector in 2002.


In 2008, the TRA investigated a dispute between MenaTelecom (Mena) and the Bahrain Telecommunications Company (Batelco). Mena alleged that Batelco, the former public monopoly telecommunications provider, had deliberately obstructed it in getting international telecommunications access in breach of Batelco’s obligations under the various statutes and licences that govern the telecommunications liberalisation plan in Bahrain. The TRA investigated Batelco’s actions and found that Batelco had not complied with its regulatory obligations by not acceding to Mena’s reasonable requests for access.


In late 2009, the TRA made a final order on Batelco to enable Batelco’s competitors in the Kingdom of Bahrain to have direct access to international capacity provided by Flag Telecom (Flag) through Batelco. The order stated that Batelco should offer Mena the right to submit an order for the access it was seeking and pay an administrative fine.


Batelco launched a statutory arbitration contesting the decision on 14 December 2009. Batelco argued, amongst other grounds, that the order should be quashed as the TRA had misinterpreted the Telecommunications Law and Batelco’s Reference Offer and that the TRA had erred procedurally in producing the order. The lengthy submission process culminated in a week long hearing held in Bahrain in December 2011.


The Panel dismissed Batelco’s arguments that the order should be quashed on these grounds. It found that the TRA had neither erred procedurally nor misapplied the regulatory framework in finding Batelco liable. The Panel accepted that the TRA had acted correctly in fining Batelco for a severe breach of its regulatory obligations, although the amount of that fine was recalculated by the Panel and reduced to 750,000 BHD (approximately 1,990,000 USD).


Clive Hopewell, Partner and Head of Charles Russell LLP Middle East said: “We are proud to have represented and worked with our long standing client, the TRA on this landmark case which has challenged the construction and purpose of the Telecommunications Law and the regulatory framework of Bahrain. Charles Russell has worked with the TRA for three years on this case and drawn upon internationally recognised telecommunications competition and litigation legal specialists.”


Paul Stone (pictured), Partner (Competition & Regulation) at Charles Russell LLP further commented: “This significant case is further evidence of the TRA’s increasing importance in the development of the Kingdom of Bahrain’s telecommunications sector and in creating a free and liberal climate that promotes competitiveness. Globally, the telecommunications sector is experiencing significant change, particularly in relation to competition and regulatory requirements. Charles Russell is pleased to be applying our international telecommunications industry knowledge and expertise to the development of the sector both within the MENA region and beyond.”


The Charles Russell team was led by Competition & Regulation Partner, Paul Stone, with assistance from Elora Mukherjee (Associate) and Bahrain based Litigation Associate Gareth Mills. Charles Russell LLP instructed local counsel Haya Rashed Al Khalifa to assist with the Bahraini legal elements and barrister Daniel Beard QC of Monckton Chambers.  

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