Nova put in Czech

Int'l arbitration rules for CME against Zelezny

PRAGUE — CME, the once-hot U.S.-backed Euro station group, has won the first round of its international case against Nova TV head Vladimir Zelezny.

The Intl. Chamber of Commerce Court of Arbitration in Stockholm issued a preliminary order, which took effect Wednesday, that temporarily reinstates CME subsidiary CNTS as exclusive provider of services including acquisitions, programming and advertising for Nova TV. Nova was CME’s profitable flagship station in the Czech Republic.

In August, Zelezny launched a new version of Nova without CME participation, a move that left CME without its only reliable source of profits, sent stock plunging and scuttled a planned merger with SBS.

Surprise ruling

Both parties claimed to be surprised by the ruling.

“The noncompetitive clause that the case is based on has nothing to do with Nova,” Zelezny told Daily Variety.

“It is very, very good news for us,” CME president and CEO Fred Klinkhammer extolled to Daily Variety.

The 15-page document specifically orders Zelezny not to manage, either directly or indirectly, program provider AQS and rival commercial station Prima TV.

It also directs him to sever any ownership interest in Beseda Holding, a TV services company with a murky ownership structure that sources claim links Zelezny with Prima TV.

The ruling was split along national lines, with the Czech judge issuing a separate statement that Zelezny said supported his case.

Seeing any results from the injunction will be another matter.

Unable to comply

Zelezny told Daily Variety, “I cannot enforce it because I would be in breach of Czech law. Despite my 60% majority, the license holding company is completely independent of me.”

Zelezny said he has asked his partners to agree to comply with the order, but they have refused.

Both sides are expected to take further action. Zelezny will ask the Dutch court hearing the case to cancel the preliminary order.

Klinkhammer said CME, which is owned by cosmetics tycoon Ronald Lauder, will go back to the court if Zelezny does not take immediate steps to return CME to its former exclusive status.

A full hearing is expected in the first half of next year. The injunction was handed down concurrent with a state visit by Czech prime minister Milos Zeman to the U.S. On his arrival, he was greeted with full-page ads taken out by CME and majority owner Lauder warning investors of the dangers of investing in the Czech Republic.

Zeman, who said Lauder’s claims were false, later came face to face with the cosmetics empire heir and former ambassador at a black-tie reception where the two had a “vigorous” exchange. Zeman had refused requests for meetings with Lauder or Klinkhammer.

CME has blamed the Czech Media Council for refusing to take any action against Zelezny or Nova.