Unitech seeks CLB nod for arbitration over Uninor stake
24 March 2012
Real estate developer Unitech on Friday sought the Company Law Board's approval to resolve through arbitration its dispute with Telenor ASA over their telecom joint venture, but the Norwegian company is set to oppose the move.
Unitech applied to the board seeking arbitration after the two companies failed to make any headway in resolving their dispute over who will control the joint venture. The board said it will hear Unitech's application on Monday.
Lawyers for Telenor told the board that they will argue against the arbitration move at Monday's hearing.
Separately, a person familiar with the development told The Wall Street Journal that talks between Unitech and Telenor "broke down over valuation" of the joint venture. The person didn't elaborate.
The dispute between the two parties, which had been simmering for some time, boiled over after India's Supreme Court on 2 February ordered the scrapping of 122 mobile-phone licenses - including 22 of Unitech Wireless - issued without auction since January 2008 to several companies, saying the allocations were rigged and underpriced (See: Suprem Court cancels all 2G licences, orders fresh spectrum auction).
Telenor holds Unitech liable for breach of warranties related to the license cancellation and has said that it will seek compensation for all investments, guarantees and damages caused by the court's decision.