The Hindu Business Line : Tata Comm loses appeal against FLAG

Mumbai, April 7 VSNL (Now Tata Communications) has lost its appeal against FLAG (now part of Reliance Globalcom) at the district court of The Hague, Netherlands in the matter of allowing FLAG access to the FLAG Europe Asia Cable (FEA) landing Station in Mumbai, which is owned by VSNL.

VSNL will be ordered to pay the cost of the proceedings, said the court order.

“In connection with determining the amount of cost to be awarded in favour of FLAG, the court will consider the underlying substantive interest of the case. Both parties have indicated at the occasion of the oral argument that the underlying substantive interest amounts to approximately $ 400 million,” said the Court in its conclusion.

Disappointed

A VSNL spokesperson said the company was disappointed with the decision of the Court and that the company is considering, with its advisors, options for appeal.

The dispute between the two companies goes back a few years; FLAG accused VSNL of denying it free access to its cable landing station and of therefore having a monopolistic hold on bandwidth prices.

FLAG wanted access for enhancing the capacity of the FEA cable system from 10 Gbps to 80 Gbps.

However, VSNL said that it was not under obligation to grant access under the construction and maintenance agreement between the two parties.

The dispute culminated in FLAG referring the matter to the International tribunal of the ICC (International Chamber of Commerce). In May 2006, the arbitration panel ordered VSNL to allow FLAG access to the FEA cable landing station.When contacted, a Reliance Globalcom spokesperson confirmed receiving a copy of the judgment, and expressed satisfaction at it.

Related Stories:
Tribunal to decide on FLAG-VSNL dispute soon
Reliance Comm's FLAG slaps notice on VSNL for $406 m

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