Tata Comm to pay over $19 m to Reliance Globalcom: ICC

The International Chamber of Commerce (ICC), the global arbitration tribunal on Monday asked Tata Communications to pay over $19 million to Reliance Globalcom, a subsidiary of Anil Ambani-led Reliance Communication Ltd (Rcomm), as the ?loss profit damages claim for sale of capacity?.

?The tribunal has directed Tata Communications to pay Reliance a sum of approximately $19 million plus interest from May 2006 as damages against the $385 million sum claimed by Reliance,? Tata Communications said in a filing with the Bombay Stock Exchange (BSE).

This was the tribunal?s fourth and the final award in the ICC arbitration proceedings over a dispute on the Flag Europe Asia (FEA) cable, which began in 2004, when Flag (now known as Reliance Globalcom) accused the then, state-owned Videsh Sanchar Nigam Ltd (VSNL), now a part of Tata Communications of denying it free access to its cable landing station and thus had a monosplistic control over band width prices.

?In December 2004, after prolonged attempts to mutually sort out the disagreements over Tata Communications anti-consumer and anti-competitive commercial practices, Reliance Globalcom was constrained to approach the International Chamber of Commerce to resolve the issues through an Arbitration Procedure?, a statement issued by Reliance Globalcom said.

Flag had wanted access for enhancing the capacity of FEA cable system from 10 Gbps to 80 Gbps. However, VSNL said it was not under obligation to grant access under the construction and maintenance agreement. The dispute culminated in Flag referring the matter to the ICC.

The Court in its April 2008 order stated, ?In connection with determining the amount of cost to be awarded in favour of Flag, the court will consider the underlying substantive interest of the case. Both parties indicated during arguments that the underlying substantive interest amounts to about $400 million?.

On which Reliance Globalcom said, ?Based on the earlier favourable awards granted by ICC Tribunal, Reliance Globalcom had upgraded capacity to 80 GB on the Mumbai ? London route. Reliance Globalcom is in process of upgrading the cable capacity on Mumbai ? Hong Kong route to 80 GB.