Faced with the cancellation of 21 of its telecom licenses by the Supreme Court, Russia's Sistema JSFC has invoked the provisions of the bilateral investment treaty (BIT) between Russia and India to settle the dispute. It said on Tuesday that it had sent a notice to the Indian government in this regard.
The Russian company holds a majority stake in Sistema Shyam TeleServices Ltd (SSTL). It believes that the cancellation of its licenses, after Sistema has invested billions of dollars in the Indian cellular phone sector, is contrary to India's obligations under the BIT, including obligations to provide investments with full protection and security and obligations not to expropriate investments.
The notice requests the Republic of India to settle the dispute relating to the revocation of Sistema Shyam's telecom licenses amicably way within six months. If this does not happen by 28 August, Sistema reserves the right to commence proceedings against the Republic of India as provided in Article 9.1 of the BIT signed between the two governments on 23 December 1994.
It said it would approach the international arbitration tribunal set up in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (Uncitral) if the issue is not resolved amicably.
Sistema said the procedures for the amicable resolution of such disputes include conciliation procedures under the conciliation rules of the United Nations commission on international trade law.
It said a copy of the letter has been sent to the Indian Embassy in Moscow and the three ministries of external affairs, finance, and communication and information technology.