Tata-Birla hearing on Idea on October 1
Birlas ask SC to reject Tatas' petition on the dispute raised on mobile JV Idea saying arbitration sought by the latter was contrary to the Telecom Policy and the Indian laws.
By PTI |
NEW DELHI: The A V Birla group has asked the Supreme Court to reject the petition of the Tatas on the dispute raised on the erstwhile joint venture mobile company Idea, saying arbitration sought by the latter was contrary to the Telecom Policy and the Indian laws.
In an affidavit, submitted on September 19, days before Tatas' petition came up for hearing in the open court on Monday, Birlas pointed out that Telecom Regulator TRAI had sought appropriate action from Department of Telecom to check Tata group company's compliance with licence condition.
On the other hand, Tatas alleged the A V Birla group had flouted the shareholders agreement with it on the joint venture and sought the Supreme Court's help for arbitration, an issue the apex court will hear again on October 1.
Opening the argument, Tata's counsel Harish Salve sought to make a strong case in favour of Tatas, saying that his clients had served a termination notice which the Birla's had questioned before buying out their joint venture partner.
Tatas had moved the apex court for appointment of an arbitrator from Birla group company Grasim after the Mumbai High Court suggested that the issue be taken up before the Supreme Court.
During the course of the hearing, Justice V S Sirpurkar wanted to know if Apex Investment (Mauritus), a Tata group company owning stake in Idea, had lost its foreign character. To this, Salve said it was still part of the Tata group.
In their affidavit, Birla group company Grasim said any relief would enable Tatas and its associates to again acquire 'impermissible' cross holdings.
In an affidavit, submitted on September 19, days before Tatas' petition came up for hearing in the open court on Monday, Birlas pointed out that Telecom Regulator TRAI had sought appropriate action from Department of Telecom to check Tata group company's compliance with licence condition.
On the other hand, Tatas alleged the A V Birla group had flouted the shareholders agreement with it on the joint venture and sought the Supreme Court's help for arbitration, an issue the apex court will hear again on October 1.
Opening the argument, Tata's counsel Harish Salve sought to make a strong case in favour of Tatas, saying that his clients had served a termination notice which the Birla's had questioned before buying out their joint venture partner.
Tatas had moved the apex court for appointment of an arbitrator from Birla group company Grasim after the Mumbai High Court suggested that the issue be taken up before the Supreme Court.
During the course of the hearing, Justice V S Sirpurkar wanted to know if Apex Investment (Mauritus), a Tata group company owning stake in Idea, had lost its foreign character. To this, Salve said it was still part of the Tata group.
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In their affidavit, Birla group company Grasim said any relief would enable Tatas and its associates to again acquire 'impermissible' cross holdings.
"Since the Tata group provides cellular services through Tata Teleservices Ltd (TTL) and its subsidiaries in the same areas as Idea, the respondent (Grasim) submits that such a claim cannot be awarded by any arbitral tribunal.
"If the relief sought by the applicants (Tatas) through arbitration is granted, the Tata group and its associates would again acquire impermissible cross-holdings in two licensees providing the same service in the same service areas," the Birla's affidavit filed through Grasim Senior Vice-President Ashok Malu stated.
Grasim further pointed out that TRAI's communication to Department of Telecom on May 10, 2006 had stated that prior to Tata group's exit from Idea, Tata Sons was holding directly and through its associates substantial equity in TTL and Idea. This was in contravention of the Unified Access Service (UAS) licence.
As per the UAS licence agreement, no single company either directly or indirectly can have substantial equity holding in more than one licensee company in the same service area for providing services.
It may be noted that TRAI had also sought an explanation from TTL on its ownership.
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If the arbitration is settled in Tata group's favour, it will have the right to buy out Birlas' stake in Idea. Tata Group, which held 48.14 per cent stake in Idea through Tata Industries (TIL) and its subsidiary Apex Investments, had sold it to Grasim for Rs 4,406 crore last year even while the termination notices were pending.While Tatas have appointed retired Supreme Court judge Arun Kumar as its nominee arbitrator, former Chief Justice of India A S Anand had consented to be the nominee arbitrator on behalf of Birlas' subject to outcome of the proceedings in the Supreme Court.
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