Bahrain telecom operator wins multi-million-dollar claim against Indian firm
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The London high court has allowed the multi-million-dollar claim of Batelco Group, Bahrain's major telecom operator, against Siva Ltd, an Indian company. In a judgment released on Thursday, Justice Popplewell of the commercial court concluded that "the claim succeeds" and awarded Batelco US $184,793,000 together with a further US $30,000 per day from November 1, 2012.
The dispute arose after S Tel, a joint venture between Batelco and Siva Ltd, had its 2G licence cancelled by India's Supreme Court in February 2012. Batelco had commenced legal proceedings alleging that Chinnakannan Sivasankaran, the well-known owner of Siva Ltd, had not enforced a settlement agreement over the joint venture.
In January 2008, a 2G licence was granted to S Tel and, during 2009, BMIC Ltd - a 100 per cent Batelcoowned subsidiary company -- acquired 42.7 per cent in S Tel which was registered in India. As per an option agreement, that was executed on May 8, 2009, Siva Ltd would have to purchase BMIC's stake in S Tel for the same amount that BMIC had paid while subscribing for those shares.
The agreement would come into force if the company failed to secure finance, or in the event that the licence granted to S Tel by Indian government faced a threat.
However, differences arose over the nature of this option agreement. Sivasankaran told the court that he had been persuaded to give such a guarantee by an assurance from the chairman of Batelco, Shaikh Hamad Abdulla Mohamed Al Khalifa, that it would "be purely cosmetic and symbolic and for optical purposes and that he would never call on it". Shaikh Hamad denied any such assurance.
After the 2G licence cancellation, Batelco announced its plan to exit S Tel by selling its 42.7 per cent stake which was supposed to take place by October 2012. Batelco then approached the UK high court of justice against Sivasankaran and Siva Ltd for failing to adhere to a settlement agreement.
Chinnakaran Sivasankaran is known as a reclusive and highly successful businessman. He is known as one of the largest landowners in Seychelles. The Siva group is a US $3 billion conglomerate with operations in palm oil, commodities trading, agro exports, shipping and logistics among others.