Telenor Mobile Communications AS v. Storm LLC

Telenor Mobile Communications AS (Telenor) (plaintiff) commenced arbitration proceedings against Storm, LLC (defendant) pursuant to an arbitration clause in their shareholder agreement that called for arbitration in New York. Each party owned shares in a Ukrainian mobile company called Kyivstar. Telenor claimed that Storm had failed to attend shareholder meetings, appoint candidates for election to the Kyivstar board, attend Kyvistar board meetings, and participate in the management of Kyivstar, including enforcement and amendment of the Kyivstar charter. Telenor also claimed that Storm, which owned shares in Kyivstar’s competitors, was in violation of a noncompete agreement with Telenor. Storm tried to stop the arbitration by filing several suits in Ukraine. Upon the petition of Telenor, a United States district court granted an antisuit injunction to allow the arbitration to proceed. The arbitral tribunal issued an award in favor of Telenor and ordered that Storm transfer Kyivstar shares to newly formed entities, elect candidates to the Kyivstar board, direct its representatives to attend the board meetings, and amend the Kyivstar charter in accordance with a Ukrainian court order. The United States district court confirmed the award. However, Storm ignored the award and continued to violate the shareholder agreement. The district court issued an order holding Storm in contempt, which Storm appealed. While the appeal was pending, Telenor moved for monetary sanctions for Storm’s continued contempt. Storm argued that its noncompliance was excused by two Ukrainian court orders that prohibited Storm from complying with the arbitral award.