Telenor-Unitech row goes for arbitration
Unitech Ltd, the Indian promoter of Unitech Wireless (Tamil Nadu) Ltd, which operates mobile telecom services under Uninor brand, on Thursday won a major case in the Company Law Board (CLB) against its foreign partner Telenor.india Updated: Apr 13, 2012 01:47 IST
Unitech Ltd, the Indian promoter of Unitech Wireless (Tamil Nadu) Ltd, which operates mobile telecom services under Uninor brand, on Thursday won a major case in the Company Law Board (CLB) against its foreign partner Telenor.
CLB has referred the dispute over management control and transfer of assets of their joint venture, Uninor, to arbitration in Singapore.
Norway-based Telenor has dispute with Unitech over rights issue and it also wants to participate in the bids with a new partner. Unitech said that as per share holders agreement, Telenor can not participate in the bids with any other partner.The impact of Thursday's judgement is that the two companies will now fight through international arbitration and it is a time consuming process.
"We are pleased that CLB has accepted our plea and respected the shareholders' agreement, which clearly defines the dispute resolution mechanism for settlement of the issues relating to the shareholders' agreement," said Unitech in a press statement issued on Thursday.
"We are yet again surprised at the order of the CLB," said a Telenor spokesperson. "We will certainly challenge this order in a higher court, as we have successfully done earlier."
Unitech responded by saying, "We are not surprised with Telenor's reaction on the CLB order which is nothing but continuation of its past conduct of complete disregard to the rights of minority shareholders and terms of the agreements signed between the shareholders."
Telenor holds 67.3% stake in Uninor, whose telecom licences were among the 122 cancelled by Supreme Court last month.
Following the cancellation of licences, Telenor accused Unitech of breach of warranties and sought damages. With 41 million customers at end-February, the JV ranks eighth in a market of 15 mobile carriers.