Loop Telecom's investor Khaitan Holdings (Mauritius) Limited (KHML) has filed international arbitration against the Indian government, seeking damages of over $1 billion for 2G licences in which it had invested and were cancelled by
Supreme Court on February 2, 2012.
KHML holds 26.95 per cent stake in Loop Telecom whose
all 21 telecom 2G licences were cancelled by apex court.
"The claimant, KHML hereby demands arbitration with the Respondent, the Union of India (the 'UoI')," the notice served by the company to Indian government said.
The firm has filed arbitration under United Nations Commission on International Trade Law and nominated Singapore-based individual Francis Xavier SC as its arbitrator.
Mauritius-based KHML said that Loop paid a cash entry of Rs 1,454.94 crore and financial guarantees worth Rs 812 crore.
The investor has sought return of $140 million
invested by it in Loop along with 12 per cent interest from the date of receipt of the investment till the date it receives the claim, its share of the lost shareholder revenue estimated in excess of $1 billion, loss of the market values of the licences in excess of $300 million.
KHML has held various round of meetings with government representative but failed to arrive at any conclusion.
Following failure of talks with Indian government, KHML has invoked international arbitration and offered to hold arbitration outside India - in London or Dubai.
KHML in the notice said that Supreme Court judgement has held Indian government process to issue licence "seriously flawed and legally untenable, as well as its policy being inherently arbitrary," and neither KHML, nor Loop, were blamed for this.
"Despite this, neither adequate or any compensation has been paid to KHML and the spectrum has been subsequently re-bid," the notice said.
The investor first served notice to the government in April 2012 for resolving disputes under Bilateral Investment Promotion and Protection Agreements following cancellation of all of Loop licences by the apex court.
Mauritius-based Kaif Investments and Capital Global, majority investor in Loop Telecom had served notice under BIPA in April 2012, following which government representatives have held three rounds of discussion.
No immediate comments were received either from company or nodal government agency Department of Telecom (DoT) on the matter.
With inputs from PTI
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