Sistema threatens Indian government over SSTL licences

29 Feb 2012

Russia’s Sistema, the parent company of cellco Sistema Shyam TeleServices (SSTL, also known as MTS India) has threatened legal action against the Indian government over the cancellation of SSTL’s licences earlier this month. Sistema, which is part owned by the Russian state, cited the Bilateral Investment Treaty (BIT) between Russia and India, saying that India was not upholding its end of the deal: ‘Sistema believes that the cancellation of SSTL’s licences following Sistema’s investment of billions of dollars into the Indian cellular sector is contrary to India’s obligations under the BIT, including obligations to provide investments with full protection and security, and obligations not to expropriate investments.’

According to local daily The Hindu, Sistema has notified the Indian government of the dispute and has set a deadline of six months to resolve the issue. If an ‘amicable’ resolution is not reached after six months, Sistema will launch legal proceedings against the Indian government.