Sistema asks India to settle 2G issue within 6 months

Sistema asks India to settle 2G issue within 6 months

Russian conglomerate Sistema has approached the Indian government seeking protection of its $ 3.1 billion investment and announced its plan to file a petition for review of the Supreme Court order cancelling its pan-India 2G licences.

Sistema has a joint venture with India’s Shyam Group — Sistema Shyam Teleservices (SSTL) — in which the Russian government also has a stake of 17.14 per cent. SSTL operates under the MTS brand name and has operations in major parts of the country with 15 million customers.  

“Cancellation of SSTL’s licenses following Sistema’s investment of billions of dollars into the Indian cellular sector is contrary to India’s obligation under the Bilateral Investment Treaty (BIT) including obligations to provide investments with full protection and security and obligations not to expropriate investments,” Sistema said in a statement.

SSTL President and CEO Vsevolod Rozanov said the company would contest the SC order by filing a review petition within this week to protect its investment of $ 3.1 billion.

The Russian parent company, which has a majority shareholding of 56.68 per cent in SSTL, has “invoked its right under Article 9.1 of the BIT signed between Russia and India for the promotion of mutual protection of investment...which came into force on August 4, 1996.”

Sistema said it has sent a formal letter through its legal counsel “to the Republic of India of the existence of the dispute and proposing to settle it in an amicable way within six months.”

Stating that letters have been sent to ministeries of external affairs, finance and communication and IT, the company said it reserves the right to commence proceedings against India before an international arbitration tribunal in case the dispute is not settled amicably within six months (i.e by August 28).