Court rules Canal 40-Azteca deal void

Announcement comes days after threat of arbitration

MEXICO CITY — In a surprise twist, indie station Canal 40 on Monday made public a court decision that the disputed production and advertising contract it signed with TV Azteca in 1998 was null and void.

The judgment was handed down in September by the Superior Court of Justice in Mexico City, and lawyers for the debt-laden Canal 40 claim this means Azteca has no jurisdiction over the channel.

The announcement comes just days after Azteca said it would take Canal 40 to the Intl. Court of Arbitration, a dispute mediator in Paris, to enforce an option it claims it holds in the privately held channel. The contract entitles the net, Mexico’s second-largest, to the rights to buy 51% of Canal 40 should the channel fail to uphold its obligations.

“As there is no contract, there is no option to buy, there’s no nothing, therefore what TV Azteca’s lawyers say before the Intl. Court in Paris is meaningless,” said Javier Quijano, attorney for Canal 40.

In 2001, Canal 40 claimed Azteca was violating the contract and ceased making revenue-share payments. Late the following year, Azteca won a decision before the Paris court and briefly seized control of Canal 40’s broadcast antenna.

The hotly contested issue came to a head after Mexican businessman Isaac Saba tried to buy Canal 40. Earlier this month, Azteca rejected a $40 million offer from Saba to relinquish rights to its 51% option.

Quijano said Saba reached an agreement with Javier Moreno Valle, owner of Canal 40, in July, but the purchase had been held up by problems liquidating the channel’s debts, as well as the dispute with Azteca.

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