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VSNL joins issue, say RCOM charges false

Videsh Sanchar Nigam says the RCOM announcement contained false and disparaging imputations against VSNL.

india Updated: Sep 20, 2006 16:31 IST
Press Trust of India
Press Trust of India

Following Reliance Communications announcement last week accusing VSNL of delaying implementation of an international tribunal order, Videsh Sanchar Nigam Ltd on Wednesday said the announcement contained false and disparaging imputations against VSNL, which were not justified or supported by facts.

In a filing on the Bombay Stock Exchange on Tuesday, the company said announcements made by Reliance Communications alleging monopolistic and anti-competitive practices by VSNL indicated a clear malafide on the part of Flag Telecom and RCOM under the guise of a corporate announcement and was done to harm the reputation of the Tata group company.

Last week, RCOM had accused the telecom services provider of delaying implementation of International Chambers of Commerce (ICC) Arbitration Tribunal's order allowing landing access to its group company Flag Telecom in Mumbai by taking the matter to a Dutch court.

RCOM had said this move was a violation of the agreement that VSNL had earlier signed with it in this regard.

It had also accused VSNL of delaying implementation of the award with a view to continue monopolistic practices in India, which would harm the ultimate users of international capacity such as ITEs/BPO due to exorbitant bandwidth prices maintained by VSNL.

It said the company had been fully compliant with its obligation to perform the award, adding that as per the New York law, which governed the terms of the Construction and Maintenance Agreement, Dutch law and international arbitration practice, there was no restriction on a party's fundamental right to challenge an award when arbitrators (in this case by majority as it is not an unanimous award) have exceeded their mandate.

The Dutch Court has admitted the writ filed by VSNL. However, the company said until the award of the tribunal was set aside, it was binding on the company.

First Published: Sep 20, 2006 16:31 IST