Almost three months after Russian telecom operator Sistema served a notice on the Indian government threatening to invoke the bilateral investment treaty between India and Russia if the issue of cancellation of its licence is not resolved amicably within six months, the attorney general has opined that the company’s claims wouldn’t hold water since its licences weren’t cancelled by the government but by the Supreme Court.
Sistema, which has a controlling stake in CDMA mobile operator, Sistema Shyam Teleservices, lost its 22 licences when the Supreme Court on February 2 declared illegal all licences granted by former telecom minister A Raja.
Subsequently, Sistema sent a legal notice to the Indian government saying that its investments in the country were protected through the bilateral investment promotion and protection agreement (BIPA). ?Should the dispute not be settled amicably by August 20, our client reserves its right to commence proceedings against India on the basis of any applicable inter-governmental investment treaty,? the company’s legal firm, M/s White & Case LLP, London, said in a communication to DoT.
According to an internal note of the department of telecommunications (DoT), citing the opinion of the AG, has said, ?Since the cause of action as stated by M/s White & Case LLP, which has made a request on behalf of Sistema to settle the case amicably with the government, has not arisen from an act of the government, it is felt that the provisions of the Bilateral Investment Promotion and Protection Agreements may not be attracted in this case. It has been decided to get a clarity on the letter issued as to whether it was appropriate in conceding the jurisdiction of BIPA in our communication?.
The government’s final opinion on the issue would be important because Sistema is among the clutch of foreign investors who have dashed legal notices to the Indian government for resolving the disputes under various provisions of BIPAs or CECA.
Other companies which have threatened to invoke the foreign investment treaties include Telenor Asia, a Singapore investor which has majority stake of 67.25% in Unitech Wireless, Kaif Investment and M/s Capital Global.
