Orascom Telecom Holding (OTH) said that it is submitting a formal “Notice of Arbitration” against the Algerian authorities, regarding “unlawful actions taken since 2008 by the Algerian government against Orascom Telecom Algerie (OTA).”

The company noted that despite the action, it “continues to be open to finding an amicable resolution with the Algerian government that is mutually beneficial to both parties and would fully support any initiative by its majority shareholder VimpelCom to seek an amicable resolution with the Government.”

OTH is taking the action based on rights granted under a 2008 accord to promote and protect investments between Algeria and Egypt. It follows a recent judgement against the Algerian operator and a member of its senior executive team, which resulted in a fine of around US$1.3 billion and a criminal sentence for the employee, related to alleged breaches of foreign exchange regulations.

The Algerian authorities and OTH have been embroiled in a long running spat over the operator, which uses the Djezzy brand, initiated by OTH’s attempts to sell the unit to a foreign partner – Algeria wanted to nationalise it instead.

Earlier this year, it looked as if VimpelCom, majority owner of OTH, had managed to settle the dispute once and for all, inking an agreement with the Algerian Ministry of Finance to explore the sale of OTA. In a statement, VimpelCom said it had “agreed that it will consider selling a majority stake in OTA, subject to an acceptable price and satisfaction of other conditions.”

VimpelCom owns 51.7 percent of OTH, which in turn owns 96.81 percent of OTA.