An Egyptian court has upheld an earlier ruling to disallow France Telecom to purchase outstanding shares in the Egyptian Company for Mobile Services (ECMS) known by its Mobinil trade name.

The firm is the focus of a protracted dispute between France Telecom and another major shareholder, Cairo-based Orascom Telecom.

The two firms jointly own the holding company that controls the firm, while Orascom also holds a 20 per cent direct stake.

'This decision is a big victory for Orascom and it will ensure that we continue to provide quality services to the Egyptian telecom market,' Orascom lawyer Osman Mowafi said.

A spokeswoman for France Telecom said the company did not wish to comment on the matter.

The court had made a snap decision in January to block the sale, after Orascom appealed a market regulator ruling that a France Telecom unit could offer to buy all outstanding shares in ECMS for 245 Egyptian pounds ($44.63) each.

A lawyer from the Egyptian Financial Supervisory Authority told Reuters that it may still appeal the decision. 'After this court ruling we will study the decision and the designated authorities will decide if we will appeal it or not,' Ahmed Masrafi said.

An international arbitration had earlier ruled that Orascom should sell its 28.75 percent stake in the holding company to the French firm for 273 pounds, a decision Orascom and Egyptian authorities said forced an obligatory offer for the entire company.

France Telecom had made three tender offers, all at prices below 273 pounds, that were rejected by the regulator before the fourth bid at 245 pounds was accepted.-Reuters