The world's biggest steelmaker, ArcelorMittal has agreed to end a 26-billion koruna ($1.75-billion) arbitration claim against the Czech Republic, the two sides said Thursday.

The two parties signed overnight a memorandum of understanding shelving the company's claims for damages. Arcelor-Mittal had charged that it was wrongly excluded from making a bid for Czech steelmaker Vitkovice Steel during its privatisation in 2005.

The memorandum includes an undertaking from the Czech government to consider the sale of an 11 percent state-owned stake in Czech steelmaker ArcelorMittal Ostrava valued at 6.8-billion koruna. That figure exceeds an expert evaluation of the stake's worth, the ministry said.

ArcelorMittal already has a stake of around 71 percent in ArcelorMittal Ostrava but has been long looking to increase that shareholding.

The memorandum between the ministry of finance and ArcelorMittal still needs to be approved by the Czech government.

Earlier this year, the finance ministry announced that the International Chamber of Commerce in Paris had rejected a claim by ArcelorMittal that it pay 5.79-billion koruna over a separate privatisation dispute.

AFP