Saturday, March 31, 2012

Telenor demands US $ 14 bn from Indian Government in compensation

Telenor has served a notice on government of India claiming damages to the amount of US $ 14 bn and further threatened to go for international arbitration if government does not resolve the issue in next 6 months. The decision came in the wake of February’s verdict of Indian Supreme Court which caused the cancellation of 22 2G licenses of Telenor Indian Joint Venture out of total 122 licenses that were cancelled after a corruption scandal unearthed.
Telenor says that decision to cancel the license and the resultant loss of investment is the breach of Comprehensive Economic Cooperation Agreement (CECA) and the situation may worsen when Indian government redistribute the cancelled licenses in next few months.
Telenor owns 67% stake in the Unitech Wireless, a joint venture between Local group Unitech. Former is already involved in a legal battle with the latter and already looking for another suitable partner in India.
Telenor has sent its notice to the Prime Minister’s Secretariat, in its notice, telecom agiant said that it invested huge amounts in Indian region based on the license and it has nothing to do with the policy or the way license was acquired. If government of India does not honour its commitment, all the invested capital will be lost.

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