Skipti hf. - Company Announcement

Notification of arbitration tribunal decision

Síminn hf., a subsidiary of Skipti hf., has received information that the
District Court of Reykjavík has confirmed as enforceable a decision in a
dispute between Síminn and the telecommunications company Seamobile Europe,
which was under arbitration by a tribunal in Paris. The arbitration tribunal
concluded that Síminn was liable for damages, particularly in respect of an
alleged loss of future profits based on an agreement that Landssími Íslands hf.
entered into with the company Geolink in 2003 concerning telecommunications
services in international waters. The amount of the claim is approximately EUR
7.7 million. 

In the opinion of Síminn, the decision of the arbitration tribunal is not
consistent with Icelandic law; it was agreed between the parties that any
arbitration should be based on Icelandic law. Síminn will now exercise the
recourses available in its defence according to law.