Total files arbitration against SCH regarding Cepsa

Total SA filed an arbitration against Banco Santander Central Hispano (SCH) Monday with the Netherlands Arbitration Institute in The Hague concerning the companies' disagreement on joint holdings in Spanish oil group Cepsa.

Oct. 14, 2003

By Doris Leblond
OGJ Correspondent
PARIS, Oct. 14 -- Total SA filed an arbitration against Banco Santander Central Hispano (SCH) Monday with the Netherlands Arbitration Institute in The Hague concerning the companies' disagreement on joint holdings in Spanish oil group Cepsa.

SCH has bid for an additional 16% of Cepsa (OGJ Online, Sept. 29, 2003). A majority stakeholder in Cepsa with 45.28%, Total reacted strongly to SCH's offering. SCH and Total have a 1990 agreement requiring mutual consent for any changes in the stake of either partner.

SHC claims that this agreement no longer applies following the July approval by Spain's Parliament of the Aldana Law, which forbids pacts signed since 1988 between shareholders that collectively hold more than 25% of a company's capital.

In a related manner, Total also reiterated its willingness to proceed with liquidation of the holding company Somaen Dos SL, the investment company that holds part of Total's stake in Cepsa. Total said the move would clairfy the positions of Cepsa's corporate shareholders.

Total has a 45% stake in Cepsa, both directly and through Somaen Dos, in which Total holds 25%. SCH, also a stakeholder in Somaen Dos, said Monday that it agreed the liquidation.