Sistema cites bilateral pact for protection
In a major embarrassment to the Centre, Russian major Sistema JSFC invoked a clause in the Indo-Russian bilateral investment treaty to seek protection of its investment in India.business Updated: Feb 28, 2012 20:45 IST
In a major embarrassment to the Centre, Russian major Sistema JSFC invoked a clause in the Indo-Russian bilateral investment treaty to seek protection of its investment in India.
Sistema Shyam TeleServices Ltd (SSTL) is one of the companies affected by the Supreme Court order of February 2, 2012.
"Sistema has invoked its right under Article 9.1 of the Bilateral Investment Treaty (BIT)... for the promotion and mutual protection of investments, dated 23 December 1994 which came into force on 5 August 1996," the company said in a statement issued on Tuesday.
Article 9.1 of the BIT provides for arbitration of disputes between two contracting parties in which one party has made investment in other country.
"We have always maintained that all our investors including Sistema JSFC and Rosimushestvo, the Russian Federal Agency for State Property Management, are being penalised for acting in good faith and in reliance on the appropriateness of the procedures established by India's telecommunications authorities," said Vsevolod Rozanov, president and CEO, SSTL.
Sistema owns about 57% equity in the company.