2G case: Foreign telcos can't claim damages from govt, says Attorney General

New Delhi: In a setback to foreign telecom players such as Sistema and Telenor, Attorney General G E Vahanvati is believed to have reiterated his earlier stand that such players cannot claim damages for cancellation of their 2G licences by an order of the Apex Court.

Vahanvati is learnt to have written that he is "unable" to re-consisder his earlier opinion and has reiterated what he had stated previously, sources with direct knowledge of the matter said.

Foreign investors in Sistema Shyam Teleservices, Uninor and Loop Telecom have served notice to government under provisions of international trade agreements seeking damages claim from it for failing to protect their investments.

The legal opinion from Vahanvati came in after the Ministry of External Affairs (MEA) and the Department of Commerce expressed views that foreign companies can take legal action against the government and claim damages under the bilateral investment protection pacts (BIPA).

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[caption id="attachment_546889" align="alignleft" width="380"] Telenor was one of the investors affected by the 2G scam. Reuters[/caption]

The MEA has said that the Indian State is a single entity and from the point of view of international law, the conduct of any organ or authority is attributable to the State of India.

Similarly, the Department of Commerce has said one has to take into account international law relating to investment disputes. The Department had cited the Award in the White Industries arbitration matter.

Sources said Vahanvati stated he had carefully considered the points made by the MEA and the Commerce Ministry and went on to say that it was his considered opinion that his earlier views do not require reconsideration.

The AG said the Constitution of India has a clear demarcation of the respective jurisdictions of the various organs of State and an award was not a judgement and had no value as a precedent.

Earlier this year, the government had sought legal opinion from Vahanvati on whether foreign investors can claim damages from the government under international agreements.

The Supreme Court in its February order had cancelled 122 telecom licences granted to players after 2008.

Of these, many licences belonged to operators where there are foreign investors. The government had received notices from many such players following the apex court judgement.

On 4 April, the court dismissed review petitions of Videocon Telecommunications, STel , SSTL, Tata Teleservices, Unitech Wireless (Uninor), Etisalat DB and Idea Cellular.

Later, a curative petition was filed by SSTL before the apex court seeking re-examination of its verdict cancelling its liceneces for the 2G spectrum allocated during the tenure of former Telecom Minister A Raja.

PTI