Axiata, Ncell Confirms Receipt of ICSID’s Arbitration Award

KATHMANDU / KUALA LUMPUR – Axiata Group Berhad ("Axiata") refers to the International Centre for Settlement of Investment Disputes (“ICSID”) arbitration proceedings (Case No. ARB/19/15) commenced by Axiata Investments UK Limited ("Axiata UK"), a wholly-owned subsidiary of Axiata, and Ncell Axiata Limited (“Ncell”) against the Federal Democratic Republic of Nepal (“Nepal”) and involving claims under the Agreement dated 2 March 1993 between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Nepal for the Promotion and Protection of Investments (“BIT”) related to Nepal's conduct towards Ncell (“BIT Arbitration”) in connection with Axiata UK’s acquisition of an indirect 80% shareholding in Ncell in 2016 (the "Transaction").

The tribunal constituted in accordance with Article 37(2)(b) of the ICSID Convention (“Tribunal”) to preside over the case has on 9 June 2023 rendered an award dismissing the claims made by Axiata UK and Ncell (the "Award").

The Tribunal has indicated in the Award that Nepal should refrain from demanding any further tax, fees, penalties, or interests in relation to the Transaction.

Arising from Nepal’s non-adherence to Tribunal orders during the early stage of the process, Nepal has also been ordered to pay certain sums to Axiata UK and Ncell, being a sum of approximately USD1.4 million (RM6.5 million¹) to Axiata and to reimburse Ncell for the cost of a loan taken out by Ncell. No sums are payable by Axiata UK or Ncell under the Award.

Axiata respects the decision of the Tribunal and is consulting its legal advisors in relation to the Award. Further announcements will be made upon material developments arising from the matter. The Group thanks ICSID and all participants in the proceeding and will continue to engage with the Government of Nepal (“GoN”) in a constructive manner. Ncell remains fully committed to serving its customers and the people of Nepal.

For further information and context on the matter, please refer to the following announcement to Bursa Malaysia on 19 December 2019².

Axiata and Ncell have made significant contributions to the socio-economic development of Nepal. As the country’s largest taxpayer, Ncell contributed NPR283 billion (USD2.1 billion or RM9.9 billion) in taxes and fees as of last Fiscal Year FY 2021/2022 since its inception. Ncell, both directly and indirectly, supports more than 25,000 jobs and connects over 17 million customers across its networks. Under its Corporate Social Responsibility ambit, Ncell has invested more than NPR1.75 billion (USD13.3 million or RM61.2 million) in various social projects identified as critical to the nation that include education, health, disaster management and environment.