Decision on BIT rests on outcome of two cases: Sistema on 2G verdict

Russia's Sistema JSFC on Tuesday said it will await outcome of two separate court cases before thinking of using India-Russia bilateral investment treaty (BIT) to seek damages over its cancelled 2G telecom licences.

Sistema was one of the eight operators whose 2G spectrum allocation and telecom licences were struck down by the Supreme Court in 2012 over alleged irregularities in their allocation. A trial court, last week, acquitted all accused of graft and money laundering charges.

When reached for comments post the verdict of the special court, Moscow-based firm's press office said Sistema has the right to resort to BIT mechanism but would await outcome of two other court cases.

"Sistema has always tried to find an amicable solution with the Government of India with regard to the spectrum issue, and has never resorted to the BIT mechanism to resolve problems related to its telecom business in India," it said.

Sistema held 56.68 per cent in Sistema Shyam TeleServices Ltd (SSTL) that operated the MTS brand of mobile phone services. SSTL had 21 of its 22 licences cancelled in 2012.

The India-Russia BIT allows a private investor to initiate dispute arbitration proceedings against the government to protect its investments.

"Indian courts are currently reviewing two legal cases related to SSTL's spectrum - on spectrum contiguity and on the one-time spectrum charge for the period from cancellation of SSTL licences in 2012 till the auction," Sistema said.

In the first case, it is contesting levy of Rs 3,500 crore in spectrum contiguity charges for reconfiguring its non-contiguous airwaves into contiguous or 'continuous' spectrum in the 800 MHz band.

The telecom tribunal had stayed the demand but it is now before the Supreme Court, with the next hearing in January end.

The second case is related to the levy of a one-time spectrum charge for SSTL owning spectrum over the initial limit of 2.5 MHz in its Rajasthan circle from the time of the firm's licence cancellation in 2012 till the auction. The case is in the telecom tribunal.

"We have the right to resort to the BIT mechanism, but our final decision will depend on the outcome of the above proceedings," Sistema said.

The oil-to-telecom conglomerate, however, did not answer detailed queries.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel