The global arbitration tribunal of the Hague-based International Chamber of Commerce (ICC) has directed Tata Communications to pay Reliance Globalcom, formerly Flag Telecom, $19.29 million (Rs 85 crore) plus interest as damages over a dispute between the companies.
The penalty is against Reliance Globalcom’s petition – which had earlier won an arbitration case against the Tata group company – seeking $385 million in damages.
According to a release issued by Reliance Communications, the company expects to receive about $21.42 million (Rs 94 crore) as damages from Tata Communications.
This includes interest calculated from May 17, 2006, till the receipt of the damages awarded by the ICC tribunal.
Reliance Globalcom is the international arm of Reliance Communications. The tribunal has ruled Reliance Globalcom’s claims of damages against Tata Communications in congruence with the New York Law requirements to satisfy a loss damages claim for sale of capacity, it said.
Earlier in the day, Tata Communications (formerly VSNL) informed BSE that the company was asked to pay Reliance $19 million.
The issue dates back to December 2004, when Reliance Globalcom (then Flag Telecom) approached ICC alleging that Tata Communications had denied access to its cable landing station in Mumbai. It also had accused the Tata group company of not permitting it to upgrade the Flag Europe Asia (FEA) cable.
In May, Reliance Globalcom won the arbitration suite against Tata Communications even though the quantum of the penalty was not pronounced.
The FEA cable passes through 15 countries and has its landing station, which is in Mumbai, is controlled by Tata Communications.
