India - Russia headed towards investment arbitration?

Following the cancellation of the 2G licenses of Sistema Shyam TeleServices, the Russian conglomerate Sistema JSFC, majority shareholder in Sistema Shyam, has invoked Article 9.1 of the India-Russia Bilateral Investment Treaty ("BIT") to protect its investment. 

The Russian investor has sent letters to the Ministry of External Affairs, the Finance Ministry and Ministry of Communications and IT, Government of India, apart from the Indian embassy in Moscow, informing them of its intention to commence arbitration proceedings if the problem was not resolved by 28 August 2012. 

Sistema is of the opinion, according to a statement issued by the company, that the cancellation of Sistema Shyam's licenses following Sistema's investment of billions of dollars into the Indian cellular sector is contrary to India's obligations under the BIT, including obligations to provide investments with full protection and security and obligations not to expropriate investments. 

The Indian company is also resorting to other kinds of legal recourse, more details on which may be found here.

More information on the status of this dispute will be put up as the story unfolds.

Update: Read about this upcoming dispute and investment arbitration involving India, here, here and here.