Loop Telecom investor Khaitan Holdings (Mauritius) Ltd (KHML) has initiated international arbitration proceedings against the Indian government and is seeking damages of $1.4 billion for the cancelled 2G telecom licenses, reports The Economic Times. The company has demanded the government to appoint an arbitrator in the next two months and offered to hold arbitration proceedings in London or Dubai. KHML had invested $140 million in Loop Telecom and currently owns 26.95% stake in the telco. The company has sought return of this investment with a 12% annual interest since 2008 along with its share of the lost shareholder revenue worth more than $1 billion and the market value of its 2G telecom licenses which is apparently valued at more than $300 million. Loop Telecom had lost all its 21 2G telecom licenses in the Supreme Court judgement last February and the telco had shut down its operations in May 2012. Its sister company Loop Mobile however continued operations in Mumbai and is reportedly in talks with Airtel for an acquisition. According to a FirstPost report, KHML has alleged in the arbitration notice that these licenses were cancelled for no fault of Loop Telecom and the government hasn't provided any refund against these cancelled licenses. Instead, the government allegedly re-auctioned these licenses for a significantly higher amount to other telcos, and made a significant profit out of these cancelled licenses. KHML had first served a notice to the government under the India-Mauritius Bilateral Investment Promotion and Protection Agreements treaty in April 2012 and held several rounds of meetings between Loop investors…
