Sistema row: India says Russia free to take legal recourse

October 30, 2012 | Business | Written by

New Delhi, Oct 30: With Russia threatening to take New Delhi for international arbitration in case of investment by Sistema, India Tuesday said that while it hoped the issue would be resolved amicably, Moscow was free to take legal recourse.

“We have to understand that this is a commercial issue. While it is our hope that this issue is resolved amicably, any side in a commercial issue is free to seek legal remedy or legal recourse,” Syed Akbaruddin, the external affairs ministry’s spokesperson, told reporters here.

Mounting pressure on India, the Russian envoy had warned Monday that his country will go in for international arbitration if the issue of cancellation of 2G licence involving Russian telecom giant Sistema was not resolved in Indian courts.

“If the issue of cancellation of 2G licence to Sistema is not resolved in Indian courts, we will go for international arbitration,” Russian Ambassador to India Alexander Kadakin said on the sidelines of a cultural event.

“We are upset about the decision,” he added.

During his visit to India mid-October, Russian Deputy Prime Minister Dmitry Rogozin had expressed Moscow’s unhappiness at the stalemate over Sistema’s $3.1 billion investment in India and warned New Delhi not to change the rules of the game mid-way.

India has conveyed to Russia that as the matter was sub-judice, it will have to see what it can do to resolve the issue.

Sistema’s $3.1 billion investment in the joint venture with an Indian company, SSTL, suffered a blow with the Supreme Court’s order in February cancelling all 122 licences (including that of Sistema Shyam Teleservices Ltd that operates the MTS brand of mobile phone services in India) on allegations of bribery and corruption in the allocation of 2G spectrum.

Sistema Shyam has filed a petition before the Supreme Court, asking it to set aside the verdict cancelling its licences. The court-ordered 2G spectrum auction is expected to begin on Nov 12 with Oct 19 being the last date for applications for potential bidders.

The stalemate over the Sistema issue is speculated to be among the reasons that led to the postponement of Russian President Vladimir Putin’s visit to New Delhi, earlier expected on Nov 1, to Dec 24.

IANS