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DoT Seeks Advice On Arbitration

DoT wants foreign companies that win auctioned spectrum to commit they would not claim damages for cancelled licences under international treaties. It is seeking the insertion of a clause to this effect in the auction terms.
It is also in consultation with the Attorney General, the highest law official of the country, to understand (1) whether the foreign investors, who had investments in the Indian telcos whose 2G licenses were quashed by the Supreme Court, can sue the Indian government on the basis of international arbitration. (2) whether such a clause can be incorporated. The department is of the opinion that since the licence cancellation was a court order, BIPA or CECA clauses would not apply.
International telcos such as Russia’s Sistema and Norway’s Telenor and foreign investment funds such as KAIF Investments Mauritius and Capital Global Ltd (investors in Loop Telecom) have sent legal notices to the Indian government under the respective Bilateral Investment Promotion & Protection Agreement (BIPA) or Comprehensive Economic Cooperation Agreement (CECA). Both are expected to bid in the forthcoming 2G spectrum auction.
The DoT has also sought the law ministry’s opinion on whether foreign telcos or investors can claim damages under bilateral agreements if they misinterpreted facts, which led to the wrongful determination of licence eligibility. It has also asked whether foreign entities that invested in domestic companies whose promoters have been prosecuted on criminal charges can claim damages.
The department has also sought legal opinion whether damages can be claimed if licences have been terminated on account of violation of licence conditions.
In the context of the legal notices, the DoT has sought legal opinion whether the affected parties need to first exhaust all legal remedies in India before resorting to international treaties.

(From: Medianama, Business standard, Light Reading India)

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