The possibility of Reliance Communications (RCom) getting Supreme Court approval for its bankruptcy proceedings would not go well with Ericsson, as the Swedish telecom-gear manufacturer may have to repay ₹576 crore to the Anil Ambani group company.

On Monday, the National Company Law Appellate Tribunal (NCLAT) reiterated its earlier observation that Ericsson is liable to repay the settlement to RCom in case the latter initiates CIRP.

NCLAT has directed Ericsson to get a clarification from the Supreme Court, with the issue coming up for hearing before the apex court on April 24.

“As per the interim order, in case of non-payment of the amount and part of the same, the concerned appeal(s) may be dismissed and this appellate tribunal may direct to complete the Corporate Insolvency Resolution Process (CIRP) and may pass appropriate order. The payment of ₹550 crore in favour of Ericsson India is also subject to the decision of the appeals,” NCLAT had said in its order dated March 15, 2019.

“If the appeals are dismissed, the operational creditor will have to pay back the amount to the corporate debtors,” the order further added.

Ericsson is the operational creditor in the case, while Reliance Infratel, Reliance Telecom and Reliance Communications the corporate debtors. In a statement issued on March 18, 2019, RCom said it will look for a “successful resolution” through the CIRP.

“The Reliance-Ericsson matter has reached a peculiar stage as the Swedish company did not file a withdrawal application before adjudicating authority. Withdrawal of application by Ericsson can only be made if 90 per cent of Committee of Creditors approves, which did not come through following NCLAT’s May 31, 2018, stay order. RCom, on the other hand, wants to withdraw the appeal filed against order to initiate CIRP,” Daizy Chawla, Senior Partner, Singh & Associates.

The Counsel appearing for lead lender State Bank of India had said that the accounts of the corporate debtors were declared as non-performing assets as early as August 26, 2016.

Earlier on March 18, RCom paid ₹458.77 crore to Ericsson, avoiding a potential three-month jail term for its Chairman Anil Ambani. The payment came in a day before the deadline set the Supreme Court expired.

In January, RCom deposited ₹118 crore with Supreme Court Registry as partial payment of dues it owes to Ericsson. The Indian firm has now paid a total of ₹576 crore to Ericsson and a fine of ₹3 crore to the apex court.

The Swedish company had moved a bankruptcy court in 2017, accusing RCom of not paying ₹1,500 crore in dues for a seven-year contract to manage and operate its network.

The deal was signed by Ericsson India in 2013.

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