Lacey Yong b” tuesday, 15 march 2016

UK and Mauritian affiliates of Malaysian satellite TV group Astro have made good on threats to bring UNCITRAL claims against India, following a criminal investigation into their investment in Indian satellite TV company Sun Direct in the wake of the 2G spectrum scandal.

The 2G scandal has implicated government officials and mobile phone operators in India

Astro All Asia Networks and South Asia Entertainment Holdings issued notices of arbitration against India on 12 and 29 February, respectively. The companies are represented by Cecil and Sunil Abraham in Kuala Lumpur, a team from King & Spalding in Singapore led by John Savage and Elodie Dulac, Delhi law firm DMD Advocates and Harish Salve of Blackstone Chambers in London.

The companies have asked India to consent to the formation of a three-member tribunal to hear both claims and have proposed the appointment of UK arbitrator Peter Leaver QC of One Essex Court. GAR understands that India has yet to respond to the request or to appoint an arbitrator of its own.

The companies have brought their as yet unquantified claims under two bilateral investment treaties. UK-based Astro All Asia Networks has invoked the 1994 UK-India BIT, while South Asia Entertainment Holdings has invoked the 1998 Mauritius-India BIT. The two companies sent notices of dispute to India in 2015. A third company, Kuala-Lumpur based Astro Holdings, has also sent a notice of dispute and is considering whether to launch its own claim against India.

Astro All Asia Networks and South Asia Entertainment Holdings have both been subject to criminal investigation in India in the wake of the 2G spectrum scandal, which saw ministers accused of accepting bribes in return for awarding licences to certain mobile phone operators at discount rates.

In 2014, the companies were made subject to criminal proceedings alongside Indiabs former telecoms minister Dayanidhi Maran in light of allegations that their investments in Sun Direct TV had been a retrospective bribe to Maran for helping Malaysiabs Maxis Communications take over Indian mobile operator Aircel in 2005.

The corruption allegation was first made by Aircelbs original owner, Indiabs Siva Ventures, after losing a SIAC arbitration with Maxis Communications over the acquisition. Prosecutors say Maran coerced Siva into giving up its stake in Aircel (with the overvalue investment in Sun Direct as a quid pro quo) and then gave Aircel preferential treatment in the allocation of spectrum.

Both Maxis and Astro are controlled by the same Malaysian billionaire T Ananda Krishan, while Maranbs brother Kalanithi Moran is associated with Sun Direct.

Like other allegations relating to the spectrum scandal, the charges are being considered by Justice Om Prakash Saini, presiding over a special b2G courtb, with the only appeal to the Indian Supreme Court.

In their notices of arbitration, All Astro Asia Networks and South Asia Entertainment Holdings argue that the state subjected them to an unfair and biased investigation, breaching several provisions of the BITs. They also claim that by supervising the investigation and giving itself exclusive jurisdiction over all appeals, the Indian Supreme Court has arrogated to itself the powers of investigator, prosecutor and adjudicator, violating fundamental rules of procedure.

The UNCITRAL claims launched by Astro All Asia Networks and South Asia Entertainment Holdings are not the only arbitrations that India is facing as a result of the 2G scandal. In 2013, Khaitan Holdings Mauritius b represented by Vinson & Elkins b launched a US$1.4 billion claim against the state following the Supreme Courtbs decision to cancel 21 out of 22 of the operatorbs licenses in the wake of the scandal.

In 2011, Time Magazine listed the scandal as the worst abuse of power after the Watergate scandal.

Astro All Asia Network and South Asia Entertainment Holdings v India

Tribunal

Counsel to Astro All Asia Networks, South Asia Entertainment Holdings and Astro Holdings

  • Cecil Abraham & Partners

Partners Cecil Abraham and Sunil Abraham in Kuala Lumpur

  • King & Spalding

Partners John Savage and Elodie Dulac in Singapore

  • Dutt Menon Dunmorrsett

Partner Anuradha Dutt in New Delhi

  • Harish Salve SA of Blackstone Chambers in London

Counsel to India

External counsel not yet appointed.

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