Hutch-Essar row in arbitration

Tribunal on BPL's Mumbai Circle within 30 days.

The Bombay High Court today directed Hutchison Essar and its joint-venture partner Essar to settle their dispute on selling stake in BPL Mobile Communications through arbitration.

The arbitration tribunal had to be set up within the next 30 days, and must "consider and verify" whether Essar should be restrained from selling BPL's Mumbai circle to a third party, the court said. The tribunal has a deadline of four weeks from the day it is set up for announcing its decision.

Justice Nishita Matre said the tribunal should have three members; one each from Hutchison Essar and Essar, while the third member could be chosen by both the companies.

The tribunal should also "consider and verify" whether the injunction order restraining Essar from selling BPL's Mumbai Circle to a third party was valid.

The court also gave the option of an out-of-court settlement, in case the parties agreed to it. Hutchison-Essar's plea on the termination of the share purchase agreement was rejected by the court, and it restrained BPL Mobile and shareholders from selling shares till the tribunal pronounced its order.

Earlier on August 1, Essar had terminated a deal to sell BPL's Mumbai Circle to its telecom joint-venture Hutchison-Essar, citing non-receipt of necessary government approvals.

The court also said that the five-day period for refunding the advance of Rs 1,617 crore taken as a deposit from Hutchison-Essar would commence only after the tribunal vacated the order restraining Essar from selling BPL shares to a third party.

While terminating the deal to sell BPL's Mumbai Circle, Essar had also offered to return the Rs 1,617 crore taken as a deposit, which was rejected by Hutchison-Essar.

This had led Hutchison Essar to file a case with the Bombay High Court, seeking setting up of an arbitration tribunal, and an interim protection order that restrained Essar from selling BPL stake to a third party until the proceedings were over.