wordpress blog stats
Connect with us

Hi, what are you looking for?

2G Scam: Loop Investor KHML Files $1.4B Intl Arbitration Case Against Indian Govt

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 and the Indian government for resolving this issue. However, the talks failed and as per the treaty rules, the company can initiate international arbitration if the issue was not resolved in six months.

Prior to this, Sistema Shyam Teleservices (MTS India) had also threatened to initiate international arbitration proceedings against the government if it failed to restore its 2G licenses. However, the telco later participated in March 2G auction to secure back CDMA spectrum in eight circles for Rs 3,639 crore and the Indian government had agreed to adjust Sistema’s previous license cost of Rs 1,626 crore against the new spectrum cost.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....


By Anand Venkatanarayanan                         There has been enough commentary about the Indian IT...


By Rahul Rai and Shruti Aji Murali The Indian antitrust regulator, the Competition Commission of India (CCI) has a little more than a decade...


By Stella Joseph, Prakhil Mishra, and Surabhi Prabhudesai The recent difference of opinions between the Government and Twitter brings to fore the increasing scrutiny...


This article is being posted here courtesy of The Wire, where it was originally published on June 17.  By Saksham Singh The St Petersburg paradox,...

You May Also Like


The government’s endorsement is in line with its ban on Chinese tech that came into force following Indo-China border skirmishes last year.   The...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ