Can SC ruling on 2G licences be challenged under bilateral treaties?

New Delhi: The Department of Telecommunication will seek legal opinion and views of ministries of finance and external affairs on foreign telecom firms like Sistema and Telenor invoking bilateral treaties to protect their investments in the aftermath of Supreme Court cancelling their licences.

Sources said the Department of Telecom would seek opinion of the Attorney General, the nation’s highest law officer, on whether the Supreme Court order - that cancelled 122 2G licences - can be challenged under bilateral investment protection treaties India has signed with various countries.

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AG would be asked if foreign investors can claim damages from India for violation of the treaties and for failure to protect their investments.

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Sources said DoT would also seek views of Department of Economic Affairs (Ministry of Finance), Department of Legal Affairs, Department of Commerce and Department of Industrial Policy and Promotion on the subject.

The Supreme Court had on 2 February quashed allotment of 122 2G licences given under the then Telecom Minister A Raja in 2008 on the ground that they were issued in a “totally arbitrary and unconstitutional” manner.

The decision impacted operators like Uninor of Norway and Russia’s Sistema who had bought equity stakes in the Indian firms that were allocated 2G licences in 2008.

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Since the order, foreign investors like Bahrain Telecom, a partner in S Tel, and Etisalat DB of UAE have announced closure of their operations in the country.

On the other hand, Telenor, which partners real estate firm Unitech in Uninor, and Sistema (joint venture partner in Sistema Shyam Teleservices (SSTL), have invoked bilateral treaties to secure their investments in the country.

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

Sources said DoT believes that major foreign investment was directed through Russia, Singapore and Mauritius.

India has Bilateral Investment Promotion and Protection Agreement (BIPA) with Russian Federation and Mauritius, while a Comprehensive Economic Cooperation Agreement (CECA) with Singapore and Comprehensive Cooperation Partnership Agreement (CEPA) exists with Japan.

PTI