Excited! JAS settling with NT, closes the 10-year case for submarine cable network sharing dispute

Excited! JAS settling with NT, closes the 10-year case for submarine cable network sharing dispute

An ending the 10-year long case as JAS is preparing to send its subsidiary, JSTC, to negotiate with NT with the hope to settle the dispute on the revenue share with respect to the joint venture agreement for the Submarine Optical Fiber Cable Project. The negotiation was expected to conclude within the second quarter of 2021, and the company can record cash along with an interest of over 4.5 billion baht.

Jasmine Submarine Telecommunications Co. Ltd. (JSTC) is preparing to negotiate with National Telecom Public Company Limited (NT) (The merged company between CAT Telecom Public Company Limited (CAT) and TOT Public Company Limited (TOT)), who is the account receivable of JSTC in the dispute over the payment of revenue share with respect to the joint venture agreement for the Submarine Optical Fiber Cable Project (Eastcoast) with TOT for over ten years.

If JSTC succeeds in the negotiation, JAS has an opportunity to save approximately 4,500 million baht in cash, which is calculated from approximately 2,500 million baht of outstanding debt, with 7.5% accrued interest per annum until the end of 2020, which is approximately 2,027 million baht. The negotiation process with NT is expected to be concluded within the second quarter of 2021.

Prior to this, on 22 December 2014, JSTC submitted a dispute with TOT to be decided by the Thai Arbitration Institute. Afterward, on 19 August 2016, TOT also submitted to the Thai Arbitration Institute, demanding JSTC to refund the overpaid- revenue share under the same joint venture agreement and the costs associated with the loss of business opportunities for approximately 9,931 million baht.

As NT plans to be listed in the Stock Exchange of Thailand (SET) by 2021, therefore, there is a tendency that NT will compromise in order to settle debts with parties in the pending litigation, both creditors and debtors, to conclude all cases within 2021. The Securities and Exchange Commission (SEC) also wants NT to clear all the debts with its creditors and debtors before the listing approval. Since JSTC is considered a creditor of TOT who still has approximately 2,500 million baht accrued debt with accrued interest of approximately 2,027 million baht, TOT has to pay to JSTC approximately 4,500 million baht. The negotiation is now expected to be completed within the second quarter of this year.

In May 2019, JSTC received the Arbitral Tribunal arbitration award whereby “TOT makes payment of the revenue share for the amount totaling 3,395 million baht together with interest at the rate of 7.5 percent per annum until the payment is made in full”. At present, TOT has submitted a petition to revoke the arbitral award to the Central Administrative Court as well. Thus, the dispute’s result is therefore not finalized. JSTC has not considered submitting an additional related report from the said award. Although the dispute’s outcome has not yet ended in the court proceeding, JSTC and TOT can still negotiate. If a negotiation agreement is reached, the parties can then submit the negotiations’ results to the court as their conclusion.

Sources: Kaohoon

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