French entertainment-to-telecom conglomerate Vivendi Monday said it won a victory over Deutsche Telecom (DT) in its decade-long battle over the control of Polish mobile phone operator Polska Telefonia Cyfrowa, or PTC, but any final resolution is likely to be some way off.

Deutsche Telekom and Vivendi are facing off over a 48% stake in PTC, which is claimed by each of them based on previous deals with Polish conglomerate Elektrim SA, the stake's original owner. Deutsche Telekom and Vivendi have locked horns over ownership of PTC in courtrooms in Austria, Germany, France, Poland and the U.S. since litigation on the matter began in December 2000.

According to Vivendi, the Warsaw appeals court in a Sept. 24 decision sided with the French company, refusing to apply an arbitration ruling made in Vienna in late 2004 on the basis of which Deutsche Telecom and Elektrim had claimed to control PTC.

"Deutsche Telecom and Elektrim had misused the arbitral award for years as false justification to lay claim to control those PTC shares," Vivendi said in a statement.

The ruling is the latest development in a dispute that goes back to 1999, when Vivendi and Elektrim formed a joint venture, Elektrim Telekomunikacja, or Telco, through which Vivendi has invested around EUR2 billion in PTC over the past ten years.

Deutsche Telekom, which held 22.5% of PTC at the time, disputed the joint venture and the entry of the French group, which led to a protracted and complex legal battle involving around fifty cases across the world.

Under control of a new owner, Polish billionaire Zygmunt Solorz, Elektrim eventually abandoned its one-time ally Vivendi and sided with Deutsche Telekom in the dispute.

Since 2005, when Elektrim and Deutsche Telekom ousted Vivendi representatives from PTC in a boardroom coup, the Polish conglomerate and Deutsche Telekom have operated PTC, Poland's third-largest mobile phone operator by sales and number of subscribers.

Still, the battle is still far off from being resolved, people familiar with the situation said.

The execution of the Polish ruling could take weeks or months as Telco can't independently apply for the ownership change to Poland's National Court Register using the Sept. 24 ruling, a source familiar with the matter told Dow Jones Newswires.

"Under Polish corporate law, Telco cannot apply to the National Court Register on its own to correct the PTC ownership record to reflect Telco as the owner of the 48% stake," the source said. "The body that is authorized to do that is the Deutsche Telekom-controlled executive board of PTC, and naturally it's doubtful that the current board will do that."

A Polish lawyer familiar with the matter said that according to Polish law, only the company that is subject to registration may file applications to the National Court Register.

In order to produce a valid application to the register court to benefit Vivendi, new governing bodies at PTC would first need to be installed, backed by the French company.

Vivendi declined to comment further on the matter.

Deutsche Telecom said Monday it will appeal the ruling, which it said has no material impact on the structure of PTC, which runs to third place in the segment behind France Telecom-controlled former landline monopoly Telekomunikacja Polska (TPS.WA) and state-controlled Polkomtel in a market that is under pressure from increasing competition and tougher regulation.

The German telecoms group started consolidating PTC in November 2006, after installing its own management based on what the German company believed was its rightful ownership of the 48% stake, plus the undisputed 49% stake it already owned.

PTC's smaller shareholders, Carcom with 1.9% and Elektrim Autoinvest with 1.1%, are controlled by Vivendi.

Company Web site: www.vivendi.com

-By Ruth Bender and Marcin Sobczyk, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com

(Archibald Preuschat in Duesseldorf contributed to this report.)
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