Thursday, July 26, 2012

A Mauritian's turn to go the BIT way in India

As another outcome of the Indian Supreme Court's decision to cancel 2G telecom licenses, the Malaysia-based Axiata group has, according to news reports, threatened to initiate international arbitration on the Indian government, under the India-Mauritius Bilateral Investment Treaty (BIT), often called a Bilateral Investment Promotion and Protection Agreement (BIPA). 

A Mauritian entity of the Axiata group holds a 20% stake in Idea Cellular Limited, India. Axiata stated in its communication to the Indian government, that it would claim damages arising out of losses as a result of the apex court's decision to cancel several 2G licenses. Axiata has sent a legal notice, seeking resolution of the matter within 6 months of its notice, after which it would resort to arbitration under the BIT.

Last year, the home ministry had security concerns regarding Axiata's proposal to invest in equity shares of Idea Cellular. This was because an Axiata subsidiary was incorporated in Pakistan and routed voice and data traffic through an inter-connect platform for South Asia.

We will give updates as soon as we receive them, on the Indian government's reply to this notice, as well as other recent notices of arbitration such as this.

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