India worried over Sistema's notice

NEW DELHI, INDIA: The government will consult the law ministry on the notice sent to it by the Russian conglomerate Sistema threatening international arbitration proceedings if the government failed to resolve the issue of revocation of its licences within six months.

"Obviously every party involved, including the government, has the right to look at whatever the legal options are available to them. We do seek the opinion of the law ministry," R Chandrashekhar, secretary DoT, told reporters at an event here Wednesday.

Also read: Sistema's notice to Indian govt

Sistema, which holds 56.68 percent stake in Sistema Shyam Teleservices (SSTL), has invested $3.1 billion in the country and stands to lose 21 licences following the Supreme Court's verdict earlier this month quashing 122 licences issued in 2008 for 2G spectrum services.

The firm has sent a formal letter through its legal counsel to the Indian government proposing to settle the dispute in an amicable way within six months.

While the letter has been sent to three Indian ministries -- Ministry of External Affairs, Ministry of Finance and Ministry of Communication and Information Technology, a copy of it has also been sent to the Indian Embassy in Moscow.

According to Sistema, under the bilateral investment treaty, the Indian government is obliged to promote and protect foreign investments, including treating the investments in a fair and equitable way.

"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," Vsevolod Rozanov, president and chief executive officer, SSTL said in a statement Tuesday.

"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," he added.

SSTL has over 15 million customers and employs over 3,500 people.