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Russia-based Sistema JSFC (Sistema) has intensified its efforts to continue operating in the Indian telecom market.

After requesting the Minister of Communications and Mass Media in the Russian government to meet with Indian government officials on this issue, Sistema has said that it has sent a formal notice to The Republic of India notifying it of a dispute under the Bilateral Investment Treaty (BIT) between the Government of the Russian Federation and the Government of the Republic of India. 

Sistema is of the opinion that the cancellation of SSTL’s licenses following its investment into the Indian cellular sector is contrary to India?s obligations under the BIT, including obligations to provide investments with full protection and security and obligations not to expropriate investments.

The formal notice requests The Republic of India to settle the dispute relating to the revocation of SSTL’s 21 telecom licenses in an amicable way within six months.

Further, the notice states that if the dispute is not amicably resolved by August 28, 2012 Sistema reserves the right to commence proceedings against The Republic of India as provided in the BIT.

Commenting on the same, Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices Limited (SSTL) said, ?I would like to confirm that Sistema JSFC, the majority shareholder in SSTL has invoked its right under the Bilateral Investment Treaty between Russia and India and has approached the Indian Government to protect its investments in the country. We have always maintained that all our investors including Sistema JSFC and Rosimushestvo, the Russian Federal Agency for State Property Management, are being penalised for acting in good faith and in reliance on the appropriateness of the procedures established by India?s telecommunications authorities.?

?SSTL is a national telecom operator serving more than 15 million customers, employs over 3500 employees, operates through a universe of over 300,000 retailers and has made investments of over $3.1 billion. To protect its business, the company also plans to contest the Supreme Court order by filing a review petition within this week before the highest court of the land.?