Loop Telecom's investor Khaitan Holdings (Mauritius) Limited has filed international arbitration against Indian government seeking damages of over USD 1 billion for 2G licences in which it had invested and were cancelled by Supreme Court on February 2, 2012.
"The claimant, Khaitan Holdings (Mauritius) Limited (KHML) hereby demands arbitration with the Respondent, the Union of India (the 'UoI')," the notice served by Khaitan Holdings (Mauritius) Limited to Indian government said.
Khaitan Holdings (Mauritius) Limited holds 26.95 per cent stake in Loop Telecom whose all 21 telecom 2G licences were cancelled by apex court.
Mauritius based Khaitan Holdings (Mauritius) Limited said that Loop Telecom paid a cash entry of Rs 1,454.94 crore and financial guarantees worth Rs 812 crore.
Khaitan Holdings (Mauritius) Limited has sought return of USD 140 million invested by it in Loop Telecom 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.
Loop Telecom's investor has held various round of meetings with government representative but failed to arrive at any conclusion.
Following failure of talks with Indian government, Khaitan Holdings (Mauritius) Limited has invoked international arbitration and offered to hold arbitration outside India in London or Dubai.
The firm has filed arbitration under United Nations Commission on International Trade Law and nominated Singapore based individual Francis Xavier SC as its arbitrator.
No immediate comments were received either from company or nodal government agency Department of Telecom on the matter.
Khaitan Holdings (Mauritius) Limited in the notice said that Supreme Court judgement has held Indian government process to issue licence "seriously flawed and legally untenable, as well as its policy being inherently arbitrary," and neither Khaitan Holdings (Mauritius) Limited nor Loop Telecom were blamed for this.
"Despite this, neither adequate or any compensation has been paid to Khaitan Holdings (Mauritius) Limited and the spectrum has been subsequently re-bid," the notice said.
The Mauritius-based investor first served notice to the government in April 2012 for resolving disputes under