Telenor ASA, which is facing the risk of losing its permit to provide telecom services in India, sent a notice to the Indian government, claiming damages of $14 billion and threatening international arbitration if New Delhi fails to protect the Norwegian company’s investments, the Times of India reported Tuesday.
The move follows the Supreme Court of India’s Feb. 2 order to cancel 122 telecom licenses issued without auctions since January 2008 to several operators, including 22 permits to Unitech Wireless Ltd., Telenor’s joint venture with local real-estate company Unitech Ltd.
The court ordered cancellation of the licenses saying the allocation process was “arbitrary and unconstitutional.” The order will come into effect June 2.
Citing a notice that the company sent to the prime minister’s office as well as the telecom department and the corporate affairs ministry, the report said Telenor invoked a provision in India’s Comprehensive Economic Cooperation Agreement with Singapore to slap the notice and sought a resolution within six months. The company had made its Indian investment through its Singapore arm.
The license cancellation and the resultant loss of investments constitute a breach of India’s obligation under the agreement, the report cited Telenor as saying. According to the notice, it is also possible that there could be a further breach of the agreement from the manner in which the government plans to redistribute the cancelled licenses through auctions, the report said.