Loop's investors may go to international arbitrator

Loop lost all its licences following a Supreme Court order in Feb 2012 cancelling 122 telecom permits

Loop Telecom investor Khaitan Holdings Mauritius (KHML) may go to international arbitrator if the government fails to settle the ongoing disputes related to Loop Telecom.

KHML and the Department of Telecommunications (DoT) had a meeting on September 13.

KHML first served notice to the government in April 2012 for resolving disputes under Bilateral Investment Promotion and Protection Agreements (BIPA) following cancellation of all its 21 licences by the Supreme Court in the 2G case on February 2, 2012. Mauritius-based Kaif Investments and Capital Global, majority investor in Loop Telecom had served notice under BIPA in April 2012.

KHML has sought refund of $166.89 million which includes interest on direct investment in made in Loop Telecom and Rs 2,457.53 crore, including interest, on licence fee that it paid in 2008. The firm has also asked for release of bank guarantee of Rs 404 crore at zero cash cost to the firm.

In a letter to DoT last month, Vinsion & Elkins RLLP on behalf of Khaitan Holdings (Mauritius) Limited had alleged dispute with Government of India for oprotection of their investment in Loop Telecom Ltmited.

Earlier, the members of the DoT investment policy cell who met the foreign investors of Loop Telecom, which is promoted by Khaitan family, have discussed possible ways to work out a mutually acceptable solution to the alleged disputes of the bilateral treaty between India and Mauritius.

Khaitan Holdings (Mauritius) had invested more than $140 million directly into Loop Telecom, besides other indirect investments. These investments are protected under the Bilateral Treaties between the governments of India and Mauritius. However, Loop lost all its licences because of a Supreme Court order in February 2012 cancelling 122 telecom permits.