Independent Arbitration Panel agrees with TRA that Batelco committed a severe breach of its obligations and should be fined

Mobilk - An arbitration board handed down its award on 30 October in respect of an arbitration application submitted by Batelco against the Telecommunications Regulatory Authority (TRA) of the Kingdom of Bahrain.  The arbitration board said that it agreed with the TRA’s original finding against Batelco and that it had been proven that Batelco had committed a severe breach of its obligations under the Telecommunications Law and the obligations codified in the licences issued to it by TRA. In addition the award confirmed that Batelco breached the terms of its Reference Offer. The decision of the arbitration board means that TRA’s original order to Batelco has been vindicated as a result of such violations.  Despite agreeing with the TRA as to Batelco’s breaches of the law, the arbitration board decided to reduce the fine imposed upon Batelco to BD 750,000.  

 

This award is supportive of and consistent with the TRA’s objective of developing a telecommunications market based upon fair competition allowing for developed and innovative telecommunications services to be provided to the end consumer at competitive prices. This dispute, which has continued for three years of deliberations with all credibility and transparency, came to an end in favour of the telecommunications market. The regulatory regime in Bahrain is sound. It enables TRA to take enforcement actions to support the development of competition while providing adequate appeal mechanisms. Such an environment is conducive to a solid investment climate. 

 

This ruling will primarily serve the best interests of the Bahraini consumers and TRA believes that the parties have achieved collective progress through this arbitration. The award, delivered by a team of international arbitrators and highly experienced experts, is the first of its kind in the history of arbitration in the Kingdom of Bahrain that is delivered in such disputes and especially in the telecommunications sector. It is a credit to the achievements of the Kingdom of Bahrain in creating a free and liberal climate that promotes competitiveness.  

 

In late 2009 TRA issued a draft order instructing Batelco to enable other licensed companies in the Kingdom of Bahrain to have direct access to international capacity provided by Flag Telecom housed in a Batelco facility. The purpose of the draft order was to create a competitive environment in the telecommunications sector and compel Batelco to make services available to other licensed operators, and ultimately the end consumer, which could not be achieved without having another provider of such services.  Following Batelco’s failure to comply with the draft order, TRA issued a further final order in 2009 that imposed a fine upon Batelco for the breaches of its regulatory obligations now upheld by the arbitration board. 

 

Commenting on the award, Dr. Mohammed Ahmed Al Amer, TRA’s Chairman said: “Since its inception TRA has sought to primarily protect the best interest of consumers, telecommunications companies and investors for the development of a telecommunications market based upon fair and effective competition, promoting investment and supporting the national economy. A breach of the nature committed by Batelco required TRA to take enforcement action.”  

 

He added: “All the actions taken by TRA pursuant to its powers as an independent regulatory authority for the telecommunications sector in the Kingdom of Bahrain are based upon its commitment to the standards of transparency, credibility and fairness.”  

It was possible to provide such services since the date of the draft order, to speed up the reduction of prices and to make use of high quality innovative services.