Telenor: How Legal Is The Claim?

With Norwegian telecom operator Telenor claiming damages from India for cancellation of its 2G licences, the government on Tuesday said the legality of the notice could be examined within the parameters of Indian law.

Corporate Affairs Minister M Veerappa Moily said he has not seen "the letter" from Telenor, which faces the prospects of its Indian venture losing its 22 licences due to the Supreme Court order that has in all cancelled 122 licences of new 2G players.

The Norwegian company, which owns 67.25 per cent stake in Unitech Wireless through its unit registered in Singapore, served a notice on the government, threatening international arbitration if a solution was not found.

"I am yet to see the letter. We can examine it legally within the parameters of my Ministry," he told reporters outside Parliament House.

The Supreme Court had last month ordered cancellation of all 122 mobile licences awarded in 2008 under the then Telecom Minister A Raja. That included 22 licences of Telenor.

Asked about Telonor's threat that it will go to international court, if the Government fails to find a solution, Moily said the issue will have to be examined within the parameters of Indian law.

"There is a thing like a rule of law. Whether you go to international law...but we will have to examine within the parameters of our law and the law of the land," Moily said.

Meanwhile, Telenor spokesman Glenn Mandelid said in a statement, "We have informed the Government of India of our intent to invoke the provisions of the CECA (Comprehensive Economic Cooperation Agreement) between India and Singapore."

Norway's Telenor ASA, whose India joint venture is among companies that are set to lose their telecoms licences, has served a notice to the Indian government, claiming damages of nearly Rs 71,400 crore, according to a newspaper report.

Telenor is seeking a solution from the government within six months or go for international arbitration for failure to protect its investment in the country, the newspaper said, citing the notice sent to the prime minister's office.

A Telenor spokesman confirmed to Reuters it had informed the Indian government of its "intent to invoke" the provisions of the so-called comprehensive economic cooperation agreement (CECA).

"We are hopeful that it remains the government's intent to protect and encourage bonafide foreign investment in the country," the spokesman said in an emailed statement, without mentioning the damages it was seeking.

The newspaper cited Telenor as saying in the notice, which was also sent to the telecoms department and the corporate affairs ministry, it invested in India based on licences issued by the government and it had complied with the procedures.

"Despite having no role to play either in the policy or in the process through which these licences were awarded, Telenor stands to lose its entire investment made in India," the newspaper quoted the notice as saying.

Telenor had acquired 67.25 per cent stake in Uninor which was given 22 licences for 2G telecom services along with spectrum that was allocated under controversial method in 2008.

All Uninor licences were among those cancelled and the company would not be able to carry out business after June 2 unless a solution is found.

According to Telenor, it has invested over Rs 6,100 crore in equity and over Rs 8,000 crore in corporate guarantees.

The Norwegian firm has also run into a legal battle with its Indian partner Unitech.

(BW Online & Agencies)