Arbitration tribunal bars RCom from asset sale, transfer as Ericsson seeks to recover unpaid dues

New Delhi: An arbitration tribunal in an interim order has restrained debt-ridden Reliance Communications from sale, transfer or mortgaging of assets. “…we direct that the Claimant (RCom) and its affiliates are restrained from transferring, alienating. encumbrances or disposing off any of its assets without specific permission/leave of the Arbitral tribunal,” the Arbitration Tribunal comprising Justice Swatanter Kumar, Justice SB Sinha and Justice VS Sirpurkar said in an order on an appeal by telecom gear maker Ericsson India. [caption id=“attachment_816745” align=“alignleft” width=“380”] Reliance Communications. Reuters.[/caption] Ericsson has sought relief from the tribunal over payments that the Anil Ambani-led RCom owes to it. Mukesh Ambani-led Reliance Jio has signed a pact to acquire mobile business assets including spectrum, mobile towers and optical fibre network of Reliance Communications– owned by his younger brother Anil Ambani. The deal was expected to complete by March 2018 and bring relief to RCom which is reeling under debt of over Rs 38,000 crore. The tribunal said that the respondent (Ericsson) has made out an arguable case and the tribunal if of the opinion that in the event if the firm will suffer “irretrievable injury” if it is denied in any relief. “Irreparable injury in the opinion of tribunal would mean substantial injury. The applicant cannot be denied a legal remedy that is available under the law,” the tribunal order said. Ericsson has submitted various claims before tribunal including Rs 1,200 crore admitted by RCom in their correspondence and Rs 1,012 crore dues which RCom allegedly failed to pay despite repeated promises, assurance and undertakings. Lenders of RCom have invoked “strategic debt restructuring” programme to recover dues from the company. (Disclosure - Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)