Legal victory for True vs TOT as court overturns award

The Administrative Court has revoked the award rendered by the arbitrator in the dispute between TOT Plc and True Corporation Plc, meaning True does not have to pay TOT as per their joint operation agreement to expand public telephone service to the state-owned enterprise.

True Corp entered into an agreement with TOT to jointly invest and develop fixed-line phone business, in line with the Excise Tax Act 1984 & 2003 and the revised Excise Tax Rate Act 1984 (Issue 4) 2003, which endorse collection of excise tax from telecommunications businesses.

The cabinet resolved on Jan 28 and Feb 11, 2003, to approve a deduction of excise tax from revenue-sharing private contract parties paid to state contract parties.

TOT then deducted 14.79 billion baht from the revenue sharing to pay the excise tax.

However, on Jan 23, 2007, the cabinet overrode the resolutions, stating that each contract party was responsible for deducting excise taxes from the revenue sharing on their parts themselves.

TOT then demanded True return the money. The arbitrator rendered its award that True return 12.17 billion baht to TOT.

On Wednesday the Administrative Court of First Instance passed a rule to revoke the award rendered by the Arbitral Tribunal.

This means True does not have to repay TOT.

If TOT does not agree with the ruling, it can appeal to the Supreme Administrative Court.