The tussle between Telenor and its Indian partner Unitech is getting intensified following the Supreme Court ruling, cancelling all 122 telecom licences issued in 2008, with the latter on Thursday asserting that it would contest the Norwegian telecom major's demand for compensation.
On Wednesday, the Telenor Group had issued a notice to Unitech, which stated that it would seek indemnity and compensation following the cancellation of Uninor's 22 licenses by the Supreme Court.
However, Unitech has contested the Telenor's move and said the “Supreme Court has cancelled all the UAS licences and spectrum granted on and after January 10, 2008, and has raised multiple questions on the government policy, which, in no manner, can be considered as breach of warranties on the part of Unitech. It will, therefore, be incorrect to claim or even suggest that the cancellation of the UAS licences by the Supreme Court demonstrates a breach of any warranties on the part of Unitech.”
It further said: “At best, the Telenor Group can invoke the provisions between the governments for protection of their investment in India, but they shall have no valid claim on Unitech and any demand from Unitech shall be contested.”
However, the Telenor Group has been saying that the Supreme Court decision refers to actions that happened prior to its entrance into India. “The Telenor Group holds Unitech liable for the breach of warranties related to the cancellation of the licenses — seeking compensation for all investment, guarantees and damages caused by the Supreme Court Order. The Telenor Group also makes an indemnity claim against Unitech for the failure to obtain spectrum in the strategically critical Delhi circle,” it added.
According to Pal Wien Espen, Group General Counsel, Telenor Group, “The legality and validity of the licenses was a fundamental term of the share subscription agreement between the Telenor Group and Unitech. We believe that the Supreme Court's cancellation of the Unified Access Service Licenses (UASL) conclusively demonstrates a clear breach of Unitech's warranties.”
“The fact is that Uninor as a consequence of the judgment will no longer hold any UASLs. Telenor will, therefore, exercise its entitled right under the share subscription agreement to hold Unitech liable to indemnify and compensate the Telenor Group for its investment in India,” said Mr. Espen.
Interestingly, Telenor is also looking for a new partner in India. “It is Telenor Group's position that the strategic partnership with Unitech does not have a future and it, therefore, will start looking for a new Indian partner,” it added.
