Reliance Communications - FLAG receives copy of writ filed by VSNL

With reference to the earlier announcement dated August 30, 2006 regarding an Arbitral Award given by the International Court of Arbitration of International Chamber of Commerce (ICC) in the matter of Flag Telecom Group Ltd v/s Videsh Sanchar Nigam Ltd (VSNL), Reliance Communications Ltd has announced that:

1. The Company has been informed by Flag Telecom Group Ltd (FLAG) a subsidiary Company that its attorney in London has received an email copy of the Writ filed by VSNL in The Netherlands to set aside the Tribunal Award.

2. This action of VSNL is designed to delay the implementation of this Award with a view to continue its monopolistic and anti competitive practices in India which will harm the ultimate users of international capacity such as ITEs/BPO etc due to exorbitant bandwidth prices maintained by VSNL. Despite TRAI's condemnation VSNL persists with its anti competitive and monopolistic practices for its sole benefit.

3. Filing of Writ by VSNL is in violation of VSNL’s commitment under the Construction and Maintenance Agreement (C&MA) that any decision of the arbitral tribunal shall be final and binding and under ICC Rules that any Arbitration Award was binding and to waive their rights to any form of recourse.

4. FLAG has already carried out the upgrade of the FEA cable from UK to UAE with the co-operation of the relevant Landing Parties and has been unable to proceed further because of VSNL’s anti competitive attitude designed at maintaining its monopoly of the Indian Market. In contrast to VSNL’s statements, this demonstrates that the other signatories too do not share VSNL’s interpretation of the C&MA.

5. In FLAG’s view Writ has been filed by VSNL in The Netherlands with the objective of getting the award reviewed on the merits which is not permitted under the Dutch laws.

Source : Equity Bulls

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