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Our Bureau

Mumbai, Sept. 1 Tata Communications has been directed to pay $19.29 million (Rs 84.87 crore) plus interest from May 2006 as damages to Reliance Communications, in the dispute regarding denial to Reliance Globalcom (formerly FLAG), access to cable landing station in Mumbai.

According to an RCom spokesperson, the interest amount will be around $2 million, making the total amount to be paid by Tata Communication (formerly VSNL) to $21.42 million.

In a communication sent to stock exchanges, Tata Communication said the International Chamber of Commerce (ICC) in its final arbitration award has directed the company to pay $19.29 million as damages.

According to analysts, this is a relief for Tata Communications as RCom was claiming a sum of $385 million as damages.

ICC arbitration proceedings regarding the FLAG Europe Asia (FEA) Cable have been going on since 2004.

The dispute between the two companies goes back a few years; FLAG (now part of Reliance Globalcom, which is the international arm of RCom) accused VSNL of denying it free access to its cable landing station and therefore having a monopoly on bandwidth prices.

FLAG wanted access for enhancing the capacity of the FEA cable system from 10 Gbps to 80 Gbps. The Flag cable, which stretches from England to Japan and passes through 15 countries, touches India at the ‘Mumbai landing station’ which is controlled by Tata Communication.

However, Tata Communciation said that it was not under any 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 which is the global arbitration tribunal. According to industry sources, Tata Communication has initiated the process for appeal against the ruling.

More Stories on : Telecommunications | Courts/Legal Issues | Corporate Disputes | Reliance Communications Ltd | Tata Communications Ltd

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