Russia’s telecom company Sistema JSFC has said that it will await judgements in the pending two court cases in India in regards to its cancelled 2G telecom licenses before it invokes the use of India-Russia bilateral investment treaty (BIT).
Sistema was among the eight telecom operators whose telecom licences and 2G spectrum allocation were cancelled in 2012 by the Supreme Court due to irregularities in the allotment process.
Last week a trial court acquitted all accused and related companies of corruption and money laundering charges due to lack of proof.
Seeking Amicable Solution
Reacting to the verdict, the Russian company’s press office stated that Sistema has the right to resort to BIT mechanism but would await judgement in two court cases before doing so.
In its response, the company said it had always sought “an amicable solution with the Government of India with regard to the spectrum issue” , and hasn’t resorted to the BIT mechanism for resolving problems related to its telecom business.
Sistema owned a majority stake (56.68 per cent) in Sistema Shyam TeleServices Ltd (SSTL) which operated the MTS brand. The company’s licenses in 21 of the total 22 circles were cancelled in 2012.
Under the India-Russia BIT a private investor can initiate dispute arbitration proceedings against the government so as to protect its investments.
Two Cases Contesting Charges
Sistema pointed out that Indian courts were in the process of reviewing two cases related to SSTL’s spectrum – one on spectrum contiguity and another for the one-time spectrum charge levied for the period between the cancellation of SSTL licences in 2012 up till the auction.
In the first case, the company is contesting the charge of Rs 3,500 crore made towards spectrum contiguity charges for reconfiguring its non-contiguous airwaves into contiguous or ‘continuous’ spectrum allotted in the 800 MHz band.
The payment demand has been stayed by the telecom tribunal but the case is currently before the Supreme Court, where the next hearing is scheduled for January.
In the second case, it is contesting the levy of a one-time spectrum charge due to SSTL owning spectrum above the initial limit set of 2.5 MHz in its Rajasthan circle from the time the firm’s licence was cancelled in 2012 till the time of the auction. This case is with the telecom tribunal.
