Bombay HC to pass order on Hutch-Essar case

The Bombay High Court will pass an order on the Hutch-Essar case tomorrow after hearing arguments from both sides. CNBC-TV18 reports on the issues at stake and the possible impact it would have on the Hutch-Essar joint venture.

It looks like BPL's Mumbai subscribers will continue under the BPL brand for some time. The Hutch-Essar battle will mean that BPL will continue to be neglected, at least till an interim solution is reached.

The bone of contention in this case is really the permission from the Department of Telecom, DoT, for merging BPL-Mumbai into Hutchison Essar. Hutch has challenged the termination notice served by Essar for the BPL deal.

Hutch's argument is that it has paid 97.5 per cent of the money to BPL and to get DoT's permission is its responsibility and Essar should just transfer the shares to Hutch. Essar however says that DoT permissions are mandatory for it to complete the deal.

Essar had terminated the agreement to merge BPL on the pretext that Hutch did not manage to fulfill all requirements and did not get DoT approvals. Essar then said that it would manage the operations of BPL entirely on its own. After putting BPL back on its feet, Essar plans to sell it to a third party.

Hutch, however, says that in case it does not get approvals from DoT, it should have the right to sell, since it has paid for the deal.