"The government has appointed Curtis, Mallet-Prevost, Cole and Mosle LLP, USA based-law firm, as counsel in the arbitration," an official source said.
The law firm will charge fees in the range of USD 160- 700 per hour based on the level of lawyer rendering services, the source added.
The firm will charge for all third party expenses at its actual cost.
The government is also believed to have agreed to pay business class airfares for travelling and related expenses based on actual bills.
The firm may also charge USD 0.1 per photocopy and USD 60 per hour for proofreading under the agreement, sources said.
The arbitration between Khaitan Holdings and the government will take place in London.
Khaitan Holdings holds 26.95 per cent stake in Loop Telecom whose 21 telecom 2G licences were cancelled by the Supreme Court in 2012.
Mauritius-based Khaitan Holdings said that Loop paid a cash entry of Rs 1,454.94 crore and financial guarantees worth Rs 812 crore.
Khaitan Holdings has sought return of USD 140 million invested by it in Loop along with 12 per cent interest from the date of receipt of the investment till the date it receives the claim, its share of the lost shareholder revenue estimated in excess of USD 1 billion, loss of the market values of the licences in excess of USD 300 million.