Telecom players, whose licences were cancelled, could seek compensation

| | Updated on: Dec 21, 2017
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The acquittal of all the prime accused in the 2G spectrum scam by a trial court could prompt operators, whose licences were cancelled by the Supreme Court in 2010, to seek compensation for the losses they suffered.

The Supreme Court had cancelled 122 licences on the grounds that the telecom ministry under A Raja had not followed the due process in its distribution. A number of foreign operators including Telenor, Sistema and Etisalat had been affected due to that order. With all those named by the CBI acquitted by the court, the operators could legally seek compensation.

“ was a policy decision taken by the then administration, and policy decisions do not have to be always right...there is room for error and improvement. The Supreme Court judgement of cancellation was always hasty, wrong and unjustified, and caused huge losses, damaged reputations and caused economic crises. You can be sure that this will be added ground for proceeding against India in the BIT Arbitrations. The lesson is what the Supreme Court told us many years ago, that courts should be slow to interfere in economic and policy decisions,” said Ramji Srinivasan, senior advocate, Supreme Court.

Industry analysts said the apex court’s 2010 ruling had led to massive job losses, closure of several businesses and value destruction of assets worth thousands of crores. “The 2G spectrum scam brought the entire industry to its knees. Now the court says no one is responsible for it. Its a bizarre situation and gives the affected operators an opportunity to seek compensation,” said BK Syngal, former Chairman, VSNL.

Reliance Communications and Essar Group said they welcome the court decision but did not elaborate on their next course of action. Norway’s Telenor said its lawyers were reviewing the court order.

Former Airtel CEO Sanjay Kapoor said that though the ruling would not have any major impact on the industry. “The industry has gone through a painful period for the last 7-8 years so nothing can undo that. Now it is only of academic interest whether the operators whose licences were cancelled will seek compensation.”

Published on January 09, 2018

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