Russia’s Sistema Joint Stock Financial Corporation, telecom giant Vodafone Group’s Dutch subsidiary Vodafone International Holdings BV and UK-based Children’s Investment Fund Management LLP are among the foreign investors that have served notices on the government for violation of Bilateral Investment Protection Agreements (BIPAs), Commerce and Industry Ministry said on Wednesday.
“The notices are handled under the provisions of the applicable BIPAs, including inter-alia through negotiations with the foreign investors for an amicable settlement of the issues,” Minister of State for Commerce and Industry Jyotiraditya Scindia said in a written reply to the Rajya Sabha.
While Scindia did not give details of the issues on which notices were served, Vodafone may have slapped the notice over the tax demand note it got for its acquisition of Hutchison’s stake.
Sistema, whose 22 telecom licenses were among the 122 permits that the Supreme Court in February had cancelled, may have filed the notice to protect its telecom business in the country. The Children’s Investment Fund Management, the largest foreign investor in Coal India Limited, has alleged that the government-owned coal producer was not protecting minority shareholders’ interest and harming the company by not opposing fuel supply pacts with power companies.
The objective of BIPAs is to provide fair and equitable treatment to the investors of either country in the territory of other nation. Such agreements increase the comfort level of the investors by assuring a minimum standard of treatment in all matters and provides for justifiability of disputes with the host country.