OREANDA-NEWS. December 3, 2007. Mobile TeleSystems OJSC ("MTS" — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that its Isle of Man subsidiaries are appealing the decision of an Isle of Man court to decline jurisdiction over their claim for the unlawful seizure of Kyrgyz mobile operator, Bitel LLC.

As it was announced earlier, in January 2007 the Isle of Man Companies brought a counterclaim in the High Court of Justice in the Isle of Man against a group of companies, including Altimo and Altimo Holdings, in order to expedite the resolution of the dispute in relation to the ownership rights in Bitel. The counterclaim was filed in response to a damage action brought by Bitel in the same court against the Isle of Man Companies. Bitel’s actions were filed in connection with the decisions of the Kyrgyz courts that deprived the Isle of Man Companies' of their ownership rights in Bitel.

In their counterclaim the Isle of Man Companies state that as a result of Kyrgyz Judgments the Bitel interests were unlawfully seized and transferred by entities controlled by Altimo and all of Bitel’s assets were subsequently unlawfully transferred to Sky Mobile. These Kyrgyz judgments were made as a result of flagrant breach by the Defendants of lawful injunctions granted by the BVI and English Courts, which characterized the litigation leading to the Kyrgyz judgments as "vexatious and oppressive" and outside the appropriate arbitration forum.

In May 2007, it was confirmed in the London Court of International Arbitration (LCIA) that the Isle of Man Companies were not obligated to transfer ownership rights in Bitel to any other party, which means that the Isle of Man Companies are the rightful owners of Bitel.

However, despite this, the High Court of Justice in the Isle of Man declined jurisdiction to consider the counterclaim on the merits and indicated that future proceedings in relation to the counterclaim should probably take place in the Kyrgyz courts.

"In our opinion, the decision of the Isle of Man court on the jurisdiction is wrong and unjust. The Isle of Man Companies have already filed an appeal to overturn it," commented Director of Corporate and Legal Affairs of MTS, Mr. Ruslan Ibragimov.

"The Isle of Man court decision is a purely procedural decision and has nothing to do with the merits of our counterclaim. We continue to believe that our claim for redress is overwhelmingly strong and will continue to pursue our claim to be given fair treatment," added Mr. Ibragimov.