Telecom Min wants LawMin to be ready for any Sistema action
New Delhi: The telecom ministry is learnt to have asked the law ministry to firm up its opinion and take necessary steps on expected legal action by Russian conglomerate Sistema against the government.
Telecom Minister Kapil Sibal in a letter to the Law Ministry has said that all requisite necessary measures like appointment of arbitrator and firming up the stand of the government should be taken if Sistema seeks arbitration, sources said.
Sistema has 56.68 percent stake in operator SSTL, whose 21 of 22 licences have been cancelled by the Supreme Court on February 2.
"The time line for amicable settlement with Sistema JSFC, Russia and Government of India expired on August 28, 2012. It is further informed that Sistema is not taking part in the forthcoming auction of spectrum," Sibal said in the letter to Law Minister Ashwani Kumar.
"Thus, Sistema JSFC, Russia may seek arbitration, hence it is important to take all requisite necessary measures like appointment of arbitrator, finalisation of legal team/counsel, firming up the stand of the government etc. For any eventuality," he said in the letter.
Sistema JSFC had served a notice to the government on February 28 under Bilateral Investment Promotion and Protection Agreement (BIPA).
In the notice, the Russian conglomerate had said that in case the dispute (regarding cancellation of its India joint venture telecom licences) is not settled amicably through conciliation by August 28, 2012, Sistema reserves its right to commence proceedings against India on the basis of any applicable intergovernmental investment treaty.
The Russian government, which has 17.14 percent stake in the company, has been expressing concern and pressing the Indian government to ensure protection of Sistema's investment.
Last month, Russian Ambassador to India Alexander Kadakin had said that Russia will go for international arbitration if the issue of cancellation of 2G licence involving Russian telecom giant Sistema was not resolved in Indian courts.
SSTL, which provides CDMA based telecom services, has said that "it has been unfairly penalised in the February ruling of the Supreme Court and has filed a Curative Petition seeking to restore its licences."
The CDMA service provider has been arguing that there is no demand for the spectrum in which it operates and the prices set by government are very steep.
Government has set minimum price of pan-India spectrum in 800 Mhz band around 11 times high compared to amount which companies paid to get it in 2008. The spectrum are proposed to be auctioned in blocks with each block having 1.25 Mhz airwaves frequencies that are required to transmit signals.