Sistema sends notice to the government of India to settle dispute over revocation of SSTL licenses

 

By Telecom Lead Team: Sistema, the largest
diversified public financial corporation in Russia and the CIS, announced that
it has sent a formal notice to the government of India over the decision by the
Supreme Court of India to cancel 122 telecom licenses, including 21 licenses
belonging to Sistema Shyam TeleServices (SSTL), in which Sistema owns a 56.68
percent share.

 

The notice reads a dispute under the Bilateral Investment
Treaty (BIT) between the Government of the Russian Federation and the
Government of the Republic of India arising from the decision of the Supreme
Court of India issued on February 2, 2012.

 

Sistema believes that the cancellation of SSTL’s
licenses following Sistema’s investment of billions of dollars into the Indian
cellular sector is contrary to India’s obligations under the BIT, including
obligations to provide investments with full protection and security and
obligations not to expropriate investments.  

 

I would like to confirm that Sistema JSFC, the majority
shareholder in Sistema Shyam TeleServices Ltd (“SSTL”) has invoked
its right under the Bilateral Investment Treaty between Russia and India and
has approached the Indian Government to protect its investments in the country.
We have always maintained that all our investors including Sistema JSFC and
Rosimushestvo, the Russian Federal Agency for State Property Management, are
being penalized for acting in good faith and in reliance on the appropriateness
of the procedures established by India’s telecommunications authorities,” said Vsevolod
Rozanov, president and CEO, Sistema Shyam TeleServices Ltd (SSTL).

 

Sistema has raised its right under Article 9.1 of the
Bilateral Investment Treaty (BIT) signed between the Government of the Russian
Federation and the Government of India for the Promotion and Mutual Protection
of Investments dated 23 December 1994 which came into force on 5 August 1996.

 

The formal notice requests the government of India to
settle the dispute relating to the revocation of SSTL’s 21 telecom licenses in
an amicable way within six months.

 

The company added that if the dispute is not amicably
resolved by August 28, 2012 Sistema reserves the right to commence proceedings
against The Republic of India as provided in the BIT. 

 

Sistema believes it has a strong case and reserves the
right to commence proceedings against India before an international
arbitration tribunal set up in accordance with the Arbitration Rules of the
United Nations Commission on International Trade Law (UNCITRAL) and/or in any
other available forum if the dispute is not settled amicably within the
deadline of 6 months.

 

The company said according to the BIT, the
government of India is obliged to promote and protect foreign investments,
including treating the investments in a fair and equitable way, providing them
full protection and security, and not expropriating the investments.”

 

SSTL is a national telecom operator serving more than 15
million customers, employs over 3500 employees, operates through a universe of
over 300,000 retailers and has made investments of over USD 3.1 billion. To
protect its business, the Company also plans to contest the Supreme Court order
by filing a review petition within this week before the highest court of the
land,” Vsevolod added.

 

A few days back, Sistema announced that it will contest the Supreme Court order on 2G spectrum by
pursuing all available legal remedies. 

 

Danish Khan

[email protected]

 

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