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International Tribunal Rejects Claims Against India

  • 21 Jan 2020
  • 4 min read

Why in News

The Government of India in its recent press release has announced that the International Arbitration Tribunal has dismissed all claims against India in entirety in relation to cancellation of Letters of Intent for providing 2G services.

  • The verdict was pronounced last year in July 2019 by the International Arbitration Tribunal constituted in accordance with the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, 1976.
  • The proceedings were administered by the Permanent Court of Arbitration (PCA).

Key Points

  • Parties Involved: The claims were filed by Tenoch Holdings Limited (Cyprus), Mr Maxim Naumchenko (Russian Federation) and Mr Andrey Poluektov (Russian Federation) against India under the Bilateral Investment Treaties with Cyprus and Russian Federation.
    • Bilateral Investment Treaties between two countries allows a private investor to initiate dispute arbitration proceedings against the government to protect its investments.
  • Underlying Reason: The arbitration arose out of the cancellation of Letters of Intent for the issuance of telecommunications licences to provide 2G services in five telecommunications circles in India, inter alia, for India’s essential security interests.
  • Agreements: The arbitration was carried out in accordance with the Agreement signed between:
    • Government of the Russian Federation and the Government of the Republic of India for the Promotion and Mutual Protection of Investments, and
    • Government of India and the Government of the Republic of Cyprus for the Mutual Promotion and Protection of Investments.

Note:

Letters of Intent

  • A Letter Of Intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. In business, it is commonly used as an initial proposal to the other party.

International Arbitration Tribunal

  • It is an independent non-governmental panel of independent and impartial experts.
  • It generally comprises of three members nominated by the Parties (or appointed by the International Arbitration Institution, or by a National Court) on the basis of their legal and practical expertise and knowledge, to render a final and binding award.

Permanent Court of Arbitration

  • Established in: 1899.
  • HQ: Hague, Netherlands.
  • Purpose: It is an intergovernmental organization dedicated to serve the international community in the field of dispute resolution and to facilitate arbitration and other forms of dispute resolution between States.
  • Structure: The PCA has a three-part organizational structure consisting of:
    • Administrative Council- to oversee its policies and budgets,
    • Members of the Court- a panel of independent potential arbitrators, and
    • International Bureau- its Secretariat, headed by the Secretary-General.
  • Funds: It has Financial Assistance Fund which aims at helping developing countries meet part of the costs involved in international arbitration or other means of dispute settlement offered by the PCA.

Source: PIB

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