India prevails in two BIT Arbitrations and recovers full costs

India has emerged victorious in two bilateral treaty investment (BIT) arbitrations related to the 2G spectrum case.

. The arbitrations were filed by international companies that were implicated in the 2G spectrum case, wherein Indian government officials were accused of allocating telecom spectrum to mobile companies at reduced rates, in exchange for bribes.

. Specifically, it was contended that the companies’ investments in Sun Direct TV were kickbacks in favour of the Maran family in return for facilitating the takeover of Aircel by Malaysia’s Maxis Communications in 2005. The Sun Group of companies was chaired by Kalanithi Maran, brother of then Union Minister for Communications and Information Technology, Dayanidhi Maran.

. In 2016, Mauritius-based South Asia Entertainment Holdings Ltd and Astro All Asia Networks based in the United Kingdom had sent notices to the Indian government invoking the India-Mauritius and India-UK BITs respectively.

. This, after the Central Bureau of Investigation (CBI) filed criminal charges against Ananda Krishnan, the owner of Astro and Maxis, as well as others. The claimants and their principals had been charged with offences under the Prevention of Corruption Act and the case was pending before the 2G Special Court.

. In 2016, a common Arbitral Tribunal comprising Michael Moser, Lucy Reed and Peter Leaver QC was constituted to decide the issue. In the arbitration proceedings, the claimants contended that India’s conduct in relation to the criminal proceedings against them was in breach of India’s substantive obligations and commitments under the India-UK and India-Mauritius bilateral investment treaties, and had resulted in harm to their investments in India.

. On October 8, 2018, the Arbitral Tribunal made two awards in favour of India. The investors’ claims against India were withdrawn with prejudice, shortly after India filed its final written submissions and prior to the substantive hearing that was scheduled in the cases.

. On account of the withdrawal “with prejudice”, India was released and discharged from the investors’ claims, complaints and causes of action. India was also awarded full costs of defending itself in the proceedings. Costs have subsequently been paid by the two foreign investor-claimants.

. These two arbitrations constitute the first set of cases in which India has achieved a complete victory over claims brought by foreign investors. As on date, more than 25 actions have been commenced or threatened against India for alleged violation of BIT obligations.

. India’s legal defence in these arbitrations was led by Arista Chambers ( Promod Nair and Shivani Singhal ), members of Essex Court Chambers ( Salim Moollan QC and Chester Brown ) and the Ministry of External Affairs ( VD Sharma and George Pothan Poothicote ).

. The Ministry of Information and Broadcasting acted as the nodal ministry for these two matters and coordinated India’s defence with inputs from the Ministry of Law, the Office of Attorney General for India KK Venugopal , the Department of Space, and the Central Bureau of Investigation.

. The investors were represented by Senior Advocate Harish Salve , Lucas Bastin (Essex Court Chambers), King and Spalding (until November 2017), Cecil Abraham & Partners (until November 2017) and DMD Advocates .

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India prevails in two BIT Arbitrations and recovers full costs

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