Bharti Infratel’s Claim From SSTL Dismissed

An arbitral tribunal has dismissed Bharti Infratel’s exit charges claim of over Rs 195 crore (including multiple interest levies) from Sistema Shyam Teleservices (SSTL).

It said the Indian arm of Russia’s Sistema JSFC is not liable to pay for premature termination of service contracts as its mobile licences were quashed by the Supreme Court in the 2G case, which resulted in a change of law — a force majeure event.

SSTL, the tribunal said, was in no position to continue with its obligations under the master services agreement with Bharti InfratelNSE -1.05 percent, as the “cancellation of its licences was an unforeseen event, beyond its control.”

The listed tower arm of Bharti AirtelNSE 5.39 percent said SSTL’s termination was voluntary as it selectively chose to participate in only eight telecom circles in the 2013 spectrum sale, instead of reobtaining mobile licences in all 21 affected circles to continue operations. The tribunal though backed SSTL’s stand saying “there is no obligation to re-obtain the licences if they were quashed/terminated due to unforeseen circumstances.”

Bharti Infratel did not immediately indicate if it would challenge the arbitral tribunal verdict in Delhi High Court. A company spokesman declined comment to ET’s emailed queries.

SSTL chief executive Neera Sharma said the tribunal has held that “the 2G judgement resulted in a change in policy in allocation of spectrum” and amounted to a change of law under the contract between SSTL and Bharti Infratel, and termination of contract owing to change of law exempted SSTL from payment of exit charges,” Sharma told ET. She added that all exit charges and related interest claims by Bharti Infratel “had been rejected by the arbitral tribunal.”

The tribunal has, on the contrary, asked Bharti Infratel to refund the over Rs 1.33 crore security deposit submitted by SSTL with interest. Total refund (including multiple interest dues) to SSTL would be roughly Rs 2.9 crore.―Economic Times