SETTLEMENT REACHED IN VALEANT INVESTMENT DISPUTE

UNCLAS BELGRADE 000075 SIPDIS DEPARTMENT FOR EB/IFD/OIA AND L/CID SENSITIVE E.O. 12958: N/A TAGS: KIDE EINV EFIN CASC PGOV SR MW OPIC SUBJECT: SETTLEMENT REACHED IN VALEANT INVESTMENT DISPUTE REF: A) 05 BELGRADE 1198 B)04 BELGRADE 2686 ¶1. (SBU) On December 14, 2005, the GOS and U.S. company Valeant Pharmaceuticals International (formerly ICN Pharmaceuticals Inc.) reached an agreement to settle on an outstanding investment dispute. The history of the case, which is an ownership dispute, is provided in Reftel A. The GOS agreed to pay $28 million by March 2006, and an additional $6 million by March 2007. This settlement is less than the stipulated $50 million awarded by the International Court of Arbitration on November 11, 2004 (Reftel B),but potentially resolves one of two ongoing investment disputes in Serbia and Montenegro. ¶2. (SBU) Ellen Pruette, Counsel for ICN/Valeant, told econoff that they are pleased with GOS's acceptance of the offer but are skeptical on its ability to deliver the first payment by March 1. Thus far, ICN/Valeant has not received any documents from the GOS, and counsel is concerned Serbia may back out of the deal. The Embassy will continue to urge the GOS to follow through with its commitment. ¶3. (SBU) Prior to the settlement, Ana Firtel Vlajic, chief of staff to the Deputy Prime Minister, told econoff that the GOS was going to accept the offer and wanted to put the dispute behind them. MOORE