Repercussions of the 2G Judgment: A BIT Claim Against India?

Reacting to the Indian Supreme Court’s judgment in the 2G spectrum case, Sistema, a Russian company, has invoked its right under Article 9.1 of the bilateral investment treaty between the government of the Russian Federation and the Government of India by filing a notice of dispute against India. Sistema has a joint venture with India’s Shyam Group — SistemaShyam Teleservices , in which the Russian government also has a stake of 17.14%. (see reports in the Economic Times and LiveMint)

This is the official explanation from the Sistema website:

[Sistema] has today sent a formal notice to The Republic of India notifying it of a dispute under the Bilateral Investment Treaty (BIT) between the Government of the Russian Federation and the Government of the Republic of India arising from the decision of the Supreme Court of India issued on February 2, 2012 regarding the cancellation of 122 telecom licenses, including 21 licenses belonging to Sistema Shyam TeleServices Ltd (“SSTL”), in which Sistema owns a 56.68% share. Sistema believes that the cancellation of SSTL’s licenses following Sistema’s investment of billions of dollars into the Indian cellular 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 formal notice requests The Republic of India to settle the dispute relating to the revocation of SSTL’s 21 telecom licenses in an amicable way within six months.  If the dispute is not amicably resolved by August 28, 2012 Sistema reserves the right to commence proceedings against The Republic of India as provided in the BIT.

Hat-tip to Luke of IA Reporter.

ICSID Panels of Arbitrators and Conciliators – South Asian Appointments

An ICSID News Release notes:

Today, Mr. Robert B. Zoellick, … announced a new list of Chairman’s designations to the ICSID Panels of Conciliators and of Arbitrators. These designations were made pursuant to Article 13(2) of the ICSID Convention, which allows the Chairman to name 10 arbitrators and 10 conciliators of different nationalities to each Panel. Members of the Panels are available for appointment by disputing parties or by the Centre in proceedings at ICSID.

As the Release notes, a list of the Members, as well as their short biographies can be found on the ICSID website (here and here, respectively).

Re: South Asian arbitrators, the new arbitrator designated to the Panel by the Chairman of the ICSID Administrative Council is Muhammad Makhdoom Ali Khan, a senior advocate from Karachi and Pakistan’s former Attorney General (2001-2007). Mr. Ali Khan replaces India’s Fali S. Nariman, a senior advocate at the Supreme Court of India and a preeminent Indian arbitrator and counsel. Over the past ten years, Mr. Nariman has been an arbitrator in six disputes (five concluded and one pending), including Wintershall, which adopted a restrictive approach in determining the applicability of the MFN clause to dispute settlement provisions of investment agreements. It is also pertinent to note that India cannot designate arbitrators as other Contracting States, such as Pakistan, can since it has not ratified the ICSID Convention. Mr. Nariman was designated by the Chairman of the ICSID Administrative Council (the head of the World Bank). Mr. Nariman, thus, was perhaps India’s strongest link with the ICSID process.

ILCurry congratulates Mr. Nariman for his contributions to the ITA system, and wishes Mr. Ali Khan the best for the duration of his designation.