Loop Telecom approaches TDSAT seeking refund of licence fee

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Loop Telecom today took the government and Trai before the sector's tribunal TDSAT seeking refund of Rs 1,454 crore paid for 2G licence and sought Rs 1,000 crore damages for loss of reputation after its cancellation.

In its petition, Loop Telecom has submitted that the Supreme Court has cancelled the UASL license issued to it by the government under its "flip flop' first-come-first-serve policy and it had to suffer a huge loss.

"The reason for quashing the first-come-first-serve policy, the UASLs and the subsequent allocation of the spectrum are wholly and absolutely attributable to the acts and omissions of the respondent (DoT & Trai) and as a direct proximate result thereof, the petitioner has suffered huge losses and damages," submitted Loop in the petition.
It further alleged that due to, "faulty issuance of license and the policy flip-flops of the government, Loop has had to pay a very heavy price" and requested for "compensation of Rs 1,000 crore for loss of reputation" along with 12% interest.

A TDSAT bench headed by its Chairman Justice S B Sinha issued notice to the Department of Telecom (DoT) and Telecom Regulatory Authority of India.

The tribunal has asked the DoT and Trai to file their reply within four weeks and posted the matter on July 17 for next hearing.

 

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Loop Mauritius-based investors invoke BIPA


Loop Telecom has moved the telecoms tribunal seeking a refund of entry fee paid for acquiring telecoms licences, release of performance bank guarantees and damages to reputation, totaling to over Rs 4,700 crore from the government.
Accepting the mobile phone company's petition, the Telecom Disputes Settlement and Appellate Tribunal issued notices to the communications ministry and sector regulator Trai on Monday and set July 17 as the next date of hearing.

Loop Telecom's Mauritius-based investors Capital Global and Kaif Investment have invoked the India-Mauritius bilateral investment treaty, making it the third company to threaten international arbitration after Norway's Telenor and Russia's Sistema, if the government was not able to resolve the matter amicably within six months.

In February, Loop Telecom had written to Prime Minister Manmohan Singh saying it will surrender the licence if the government refunds Rs 1,454 crore fee along with interest. In April, it announced that it was shutting down business in the country, except in the Mumbai circle where its sister concern Loop Mobile offers services.

In its plea filed with the telecoms tribunal, Loop Telecom has sought a refund of Rs 1,454 crore licence fee paid while obtaining 21 mobile permits in 2008 issued by former telecoms minister A Raja, and an interest of Rs 737.59 crore at SBI prime lending rates till 31st April this year.

According to a copy of the petition viewed by ET, the telco has demanded discharge of its performance bank guarantees worth Rs 696.04 crore, and asked the government to return 'wrongly levied' liquidated damages of Rs 7.8 crore with interest.

The Supreme Court on February 2 this year had cancelled all its licences issued in 2008 and termed the first-come-first-serve policy, used by the government to give out these permits, as illegal.

"The reason for quashing the first-come-first-serve policy, the UASLs and the subsequent allocation of the spectrum are wholly and absolutely attributable to the acts and omissions of the respondent and as a direct proximate result thereof, the petitioner has suffered huge losses and damages," the telco appealed.

Due to 'faulty issuance of license and the policy flip-flops of the government, Loop has had to pay a very heavy price,' the telco said in its plea and sought compensation of Rs 1,000 crore with interest from the government for 'loss of reputation.'

It has also asked the court to direct the government to pay around Rs 800 crore for expenses it incurred for setting up infrastructure and undertaking corporate expenses while renewing bank guarantees and interest on loans taken for rollouts.

Besides the monetary compensation, the telco has also asked the tribunal to bar the telecoms department from taking any 'coercive action' against it like encashing its bank guarantees.

It added that the government, and not a single minister, was responsible for issuing licences and hence was liable. "The issuance of licence was defended by the Respondent no 1 (the government) in different courts, in the parliament and outside. Since the process followed by the government in issuance of the license was illegal or faulty, the petitioner can not be made to suffer on that account and quite literally made to pay for the government's poor decision making and implementation," said Loop Telecom.

The company in a statement said that it was its basic right 'as a corporate of India' to move to tribunal and added that it was 'not asking for something extra ordinary but only demanding what is rightfully due to it since its mobile permits had been deemed illegal by the Supreme Court and thereby quashed'.