The attempt made by the Company Law Board to smoothly settle the ongoing dispute between Unitech Wireless and Norwegian firm, Telenor seems to have failed.
The attempt made by the Company Law Board (CLB) to smoothly settle the ongoing dispute between Unitech Wireless and Norwegian firm, Telenor seems to have failed.
The CLB, which is hearing the cross petitions filed by Unitech and Telenor, had given a deadline of March 19 to Unitech to either buy Telenor’s stake or exit the joint venture (JV).
On March 19, a hearing was held in the closed chambers of CLB, where the parties had exchanged proposals on probable sale or purchase of their shares in the JV, Uninor. Unitech has sought about $150 million from Telenor to sell its 32.7 percent stake in their telecom joint venture to end the dispute between two partners.
However, the lawyers for both sides informed the CLB today that the parties have not been able to reach an amicable settlement over the valuation of the JV.
Unitech has now moved an application under Section 45 of the Arbitration and Conciliation Act, 1996 seeking that the disputes related to Uninor should be transferred to an arbitrator. CLB Chairman Justice B.R. Deshmukh admitted the application of Unitech and directed that the same will be heard on March 26, 2012.
The Counsels for Telenor accepted notice and waived the right to file reply, informing the CLB that they will argue against the application on Monday.
Trilegal Partner Sitesh Mukherjee briefed Senior Counsels Sanjeev Puri, S.N. Mookherjee, Rajiv Nayyar and Vibhu Bakhru, who appeared for Telenor while Luthra & Luthra Senior Partner H. S. Chandhoke briefed Senior Counsels UK Chaudhary and Amit Chadha, who appeared for Unitech.
The dispute between Telenor and Unitech has been going on for the last few months. However, the dispute between the parties intensified after the Supreme Court’s decision of February 2 cancelling all the 122 telecom licenses issued on or post January 2008. Out of the 122 licenses cancelled, Uninor holds 22 licences.
Following the Supreme Court’s order, Telenor has been wanting to part ways with its partner Unitech as they held them responsible for the breach of warranties related to the cancellation of the licenses.
Telenor then approached CLB to prevent Unitech from obstructing its attempt to run its Indian operations from a new venture while Unitech filed an appeal with the CLB to prevent Telenor from assuming full control over the business including its assets.
Telenor had bought a 67.3 percent stake in Uninor for a whopping Rs. 6210 crore ($ 1.2 billion) and the rest of stake is held by Unitech. Amarchand Mangaldas had advised Unitech while Trilegal and Allen & Overy had advised Telenor.