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Govt to review bilateral treaties to avoid legal battle with telcos

The government is planning a review of bilateral investment treaties after overseas telecom companies have invoked the pacts in a bid to protect their investments in the country.

Written by Surabhi | New Delhi | Published: April 13, 2012 1:37 am

The government is planning a review of bilateral investment treaties after overseas telecom companies have invoked the pacts in a bid to protect their investments in the country. Telecom firms,who have lost their 2G licences,have slapped the government with notices citing a breach in the bilateral pacts.

Sources close to the development said that an inter-ministerial group may be formed to study clauses in key treaties such as the Bilateral Investment Promotion and Protection Agreements (BIPA) that India has signed with other countries.

The inter-ministerial group would consist of officials from ministries of finance,commerce,DIPP,law and telecom.

“This is one of the options being considered. We need to relook clauses in such treaties in order to ensure that such an eventuality does not happen in the future again,” a government official said.

Telecom operators,including Telenor (joint venture partner of Uninor) and Sistema (JV partner of SSTL) have invoked bilateral treaties to protect their investments and also slapped notices for arbitration and damages on India after the Supreme Court cancelled 122 telecom licences in February.

Sistema has invoked the treaty between India and Russia,while Telenor invoked the agreement with Singapore through which the telecom firm routed its investment.

In its order on February 2,the Supreme Court termed these licences ‘illegal’. These 2G licences were awarded in 2008 under the then telecom minister A Raja.

The department of telecom has already sought the finance ministry’s opinion on the issue. It could also seek legal opinion of the Attorney General on how to deal with foreign investors who invoke such treaties.

India has bilateral treaties with 82 countries and has Bilateral Investment Promotion and Protection Agreement (BIPA) with the Russian Federation and Mauritius.

While there is a Comprehensive Economic Co-operation Agreement with Singapore,a Comprehensive Co-operation Partnership Agreement exists with Japan.

Department of Telecom has received representations from Unitech Wireless group companies,S Tel,Loop Mobile Telecom and Etisalat DB for protection of their investments.

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