Russia’s Sistema has warned it will seek “billions of dollars” in damages from India if licence cancellation issue of its Indian telecom venture Sistema Shyam TeleServices Ltd (SSTL) is not resolved in time.
Sistema Joint Stock Financial Corporation (Sistema JSFC) has written to the Department of Telecom (DoT) and the Ministry of External Affairs, saying: “In addition to the billions of dollars in damages that we would seek in arbitration under the bilateral investment treaty, failure to resolve this case could threaten India’s broader diplomatic interests with Russia and standing in global business community.”
Sistema JSFC holds 56.68 per cent stake in SSTL, which operates under the MTS brand and the remaining is held by Indian group Shyam. The Russian government has 17.14 per cent stake in the company.
In February, the Supreme Court cancelled 21 out of 22 licences of SSTL along with 101 other licences. These permits are valid till January 18, 2013. In May, SSTL filed curative petition before the apex court but it has not come for hearing yet. The apex court allowed companies to buy spectrum in auction if they wish to continue operation. However, SSTL did not participate in auction due to around 11 times high spectrum base price fixed by government in the recent auction and the curative petition which was pending before the court. The Russian conglomerate said in 2008 as well as in the recent auction there were no bidders for the spectrum that SSTL had been allocated. It added SSTL has used this spectrum along with massive investments to create telecom business in India.