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In its continuing legal battle with an Ecuadorean phone company, a Miami-based telecommunications company has filed a new federal lawsuit, claiming the state-owned utility improperly influenced the outcome of a recent Ecuadorean arbitration ruling. According to the lawsuit filed by Miami-based Latin American Telecom, officials of Guayaquil, Ecuador-based Pacifictel threatened, intimidated and bribed the Guayaquil arbitration panel into a decision that favored Pacifictel. The suit alleges officials of Pacifictel, which serves the southern part of Ecuador, engaged in tortious interference. “The reason why [the panel] did not reach a decision was because of the coercion and possible bribery,” said Leoncio de la Pe�a, of de la Pe�a & Associates in Miami, which is representing Latin American Telecom. De la Pe�a also said Pacifictel officials influenced the panel’s decision by conducting an aggressive public relations campaign against his client, including releasing confidential information to the Ecuadorean news media. Calixto Vallejo, Pacifictel’s attorney in Ecuador, did not return repeated calls for comment. LAT, a privately held long-distance carrier focusing on the Latin American market, and Pacifictel entered into a contract in October 2000 to jointly offer international telephone service between the United States and Ecuador. Under the contract, Pacifictel authorized LAT to operate as a provider for telephone traffic originating in the United States. Not long after that, LAT accused Pacifictel of unfairly giving more favorable treatment and preferential rates to other carriers as well as trying to drive LAT out of business. Under the contract, LAT had agreed to pay 11 cents a minute to Pacifictel. Other carriers were paying rates as low as 4 cents a minute, according to LAT. LAT said the Ecuadorean telephone company twice shut down its telephone traffic to and from Ecuador without warning in retaliation for its accusations. In February, LAT filed a lawsuit in U.S. District Court in Miami against Pacifictel, a company owned by the Ecuadorean government through a trust. The lawsuit claimed breach of contract and violation of the Florida Antitrust Act of 1980 and the Florida Security of Communications Act. The dispute also was litigated in the Court of Arbitration in Guayaquil, as required under the contract. The court is part of the local chamber of commerce. LAT claims Pacifictel owes $10.1 million, based on an expert’s report to the Court of Arbitration. The report took into consideration the lost minutes associated with the shutdown of the LAT’s telephone traffic, the installments paid by LAT from 2002 to January 2004, and costs related to satellite hook ups. Pacifictel contends that the U.S. company acted in bad faith and committed unlawful acts in Ecuador, including refusing to pay Pacifictel $16 million that it claims LAT owes since 2001. The dispute has been widely publicized in the Ecuadorean media. Some news stories have portrayed LAT as a ghost carrier with no assets in Ecuador, no contracts with any carriers in other countries and unknown shareholders. But Florida public records show that LAT was incorporated in Florida in 1997, with de la Pe�a’s firm listed as its registered agent. INCONCLUSIVE RULING On July 6, the three-judge arbitration panel in Guayaquil ruled that the contract between the two telecom companies must be terminated and the parties must reach a settlement concerning the money they owe each other. It said the payments should not include any damages or interest. Three days after the arbitration panel’s decision, both companies requested a rehearing to present their concerns about the decision. The panel denied the requests, saying that all the issues already were addressed. De la Pe�a said his client was completely dissatisfied with the arbitration ruling, which it considered inconclusive. “We decided to go with the second lawsuit because, in reality, there was no decision reached by the arbitration panel,” he said. “If you read their order that addresses the motions for rehearing that were filed by Pacifictel and LAT, that order basically says, ‘We can’t figure out who owes who what money.’” The new lawsuit, filed last month, names Pacifictel and some of its current and former officials. The officials include the former and current presidents of Pacifictel as well as the former president of the Ecuadorean government’s “Solidarity Fund,” which controls Pacifictel. Heidi A. Schulz, an associate at Astigarraga Davis in Miami who focuses her practice on international commercial litigation and international arbitration, said that typically, an arbitration panel will set damages, costs and a deadline for compliance. But Schulz, who is not involved in the LAT case, noted that the authority of the arbitration panel to decide certain matters will be determined by the scope of the arbitration clause itself. De la Pe�a said that the contract did not limit in any way what an arbitration panel could decide. It was obvious, he argued, that the arbitration panel was improperly influenced because the expert’s report clearly stated that LAT was owed $10 million, and Pacifictel knew it was going to lose. As soon as the expert issued his report, the telephone utility immediately attacked its findings in the Ecuadorean news media. On the other hand, an independent Ecuadorean organization that is dedicated to fighting corruption claims that Pacifictel should never have given LAT the 11 cents a minute rate. The Comision de Control Civico de la Corrupcion said in a 2002 report that Pacifictel and LAT’s 11 cents a minute deal was far below the 27 cents per minute that other carriers were being charged by Pacifictel. Some reports in the Ecuadorean media have said that LAT only got upset when Pacifictel subsequently gave other carriers even better rates. De la Pe�a said that he was not aware of this report by the anti-corruption organization and did not know of any carrier being charged 27 cents per minute.

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