The U.S. Federal District Judge Gerard E. Lynch granted Telenor's motion on Friday for a preliminary anti-suit injunction against Alfa Group companies Storm, Altimo and Alpren, ordering them to stop "bringing or attempting to cause the enforcement of any legal action in the Ukraine that would disrupt, delay or hinder in any way the arbitration proceedings between Telenor and Storm in New York." Altimo owns 100 per cent of Storm through Alpren and another Cyprus based company.

The order was granted following hearings before Judge Lynch on Telenor's application to the court for the injunction. Telenor petitioned the court after Altimo subsidiary Alpren commenced a lawsuit in a local Ukrainian court against Storm's General Director, Vadim Klymenko, who is also an Altimo vice president, and obtained a court order aimed at stopping both Telenor and Storm from participating in the arbitration proceedings in New York. Telenor was not a party to the case and was never served with any documents or orders related to the case. The Ukrainian court order threatens criminal prosecution against Storm and Telenor employees if they go forward with the arbitration proceedings. This injunction means that Altimo and its subsidiaries cannot allow the Ukrainian injunction to be enforced.

“Altimo's disruptive tactics are clearly backfiring. If Altimo makes further attempts to undermine the arbitration process, they risk having assets frozen and criminal charges pressed against them in the U.S. and other countries that recognize U.S. court decisions. Such a development would be most unusual for a company like Altimo," said Telenor Vice President of Corporate Communications Dag Melgaard. "As Judge Lynch recognized, Altimo likes lawsuits where it is the only real party and tries to avoid legitimate proceedings where the facts are aired on both sides. Fortunately a U.S. Judge recognized this and has ordered Altimo to end what he has called ‘shabby tactics’.”

In his decision, Judge Gerard E. Lynch said, “There is no real dispute that Altimo negotiated the entire transaction" and "agreed to the arbitration clause demanded by Telenor as part of that bargain..." Judge Lynch criticized Altimo, saying its litigation in Ukraine was conducted in the "most vexatious way possible," noting that Altimo sought to avoid arbitration by "resorting to a forum in which their home-court advantage is magnified by their willingness to play the game without letting the other team show up."

A hearing on the merits in the Kyivstar arbitration is scheduled to begin on Monday and Tuesday, December 18 and 19, 2006 in New York with a hearing on the merits. Telenor brought the arbitration in February 2006 after Altimo's subsidiary, Storm, violated the Kyivstar Shareholders Agreement by not attending Kyivstar Board and Shareholder meetings. That agreement bound the parties to settle all disputes in arbitration in New York under New York law.