RIL starts arbitration against Reliance Communications over MTN issue

Mumbai: Mukesh Ambani-led Reliance Industries today started arbitration process against Reliance Communications and nominated Justice B P Jeevan Reddy as arbitrator for disputes with the Anil Dhirubhai Ambani Group firm, which is in merger talks with South African telecom giant MTN.

The move coincided with RCom's charge that RIL had issued a fourth letter threatening legal action on MTN discussions.

''RCom has refused to participate in the conciliation meetings under the alternate dispute resolutions provisions contained in the Non-Competition Agreement,'' the Mukesh group's flagship company said justifying the move.

''RIL's notice for arbitration proceedings is legally and factually unwarranted,'' Rcom said in a statement, adding that another letter issued to the South African firm by Reliance Industries had established its mala fide intentions.

The latest in the spat between the groups controlled by the billionaire Ambani brothers comes barely a week after MTN and Reliance Communications extended their 45-day exclusivity talks by 10 days.

''MTN has agreed to continue its negotiations with Reliance in relation to such potential business combination, and has extended the period of exclusivity until 21 July 2008,'' MTN said in a statement last week.

The two companies had announced May 26 they had entered into the negotiations for 45 days for a potential business combination.

But the Mukesh Ambani-led group contacted MTN to say that it had the first right to refuse a stake in Reliance Communications, should they be sold, following a split in the group created by the late Dhirubhai Ambani.