Zain not contemplating Iraq pullout after fine

NABLUS, West Bank, June 10(Reuters) - Kuwait's Mobile Telecommunications Co (Zain) (ZAIN.KW) will continue to operate in Iraq despite an $18.6 million fine imposed by the Baghdad government, Zain CEO Saad al-Barrak said on Wednesday.

"It's not a crisis at all. It's normal... to get some penalties here and there," Barrak said in the occupied West Bank, where Zain took a majority stake in the Palestine Telecommunications Co (PalTel) earlier this month.

The Iraqi government announced in May it was fining Zain for poor cellphone service. Zain blamed the deterioration on jamming by U.S. forces trying to prevent insurgents from setting off bombs.

Asked by Reuters whether Zain planned to halt its operations in Iraq in response to the fine, Barrak replied: "Never."

Barrak described the penalty as unjustified and said "that's why we are going to arbitration".

In a Reuters interview in Baghdad on Tuesday, Zain Iraq's chief executive, Ali al-Dahwi, accused the Iraqi government of not being ready for foreign investors. He said Zain would use every legal means, including arbitration, to challenge the fine.

Zain's $1.25 billion purchase of a cellphone license is a rare case of foreign investment since Saddam Hussein's fall. (Reporting by Mohammed Assadi, Writing by Jeffrey Heller in Jerusalem, Editing by Hans Peters)