OREANDA-NEWS. Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications operator in Russia and the CIS, announces that Nomihold Securities Inc (“Nomihold”) has obtained (via a unilateral written application to the court) initial permission from the English Commercial Court to serve proceedings out of the jurisdiction on MTS.

The time for service of the claims has been extended to permit service in accordance with the requirements of the Hague Convention. Nomihold purports that MTS is liable to compensate it for a number of allegedly tortious wrongs, relating in part to recent proceedings in an international arbitration tribunal constituted under the rules of the London Court of International Arbitration (“LCIA”) between Nomihold and MTS’s subsidiary, Mobile TeleSystems Finance SA (“MTS Finance”), in the total amount exceeding USD 215 million.

MTS denies any allegation of wrongdoing and considers the claims made by Nomihold without merit and inadmissible before the English courts. MTS is considering its legal position.

As previously disclosed by MTS, MTS Finance acquired a 51% stake in Tarino Limited from Nomihold at the end of 2005. Tarino Limited was believed at that time to be the indirect owner, through its 100% owned subsidiaries, of Bitel, a Kyrgyz GSM mobile phone operator. Following the purchase of a 51.0% stake, MTS Finance entered into an option agreement with Nomihold for ‘‘Option Shares,’’ representing the remaining 49.0% interest in Tarino shares and a proportional interest in Bitel shares. Upon announcement of the completion of the transaction, Bitel’s corporate offices in Bishkek were seized by a third party on the basis of Kirgiz court decisions, which resulted in MTS losing control over Bitel’s operations.

In March 2007, MTS wrote off the costs relating to the acquisition of Bitel in the amount of USD 150 million and a liability of USD 170 million was recorded with an associated charge to non-operating expenses to account for potential liability with respect to the option for the remaining 49% of Tarino, as noted in MTS annual financial statements for year ended December 31, 2006. In January 2011, the LCIA made an award in favor of Nomihold satisfying Nomihold’s specific performance request and ordered MTS Finance to pay to approximately USD 210.8 million. In the consolidated financial statements for the year ended December 31, 2011, MTS recorded a total liability in the amount of USD 214 million.