LAWS(DLH)-2000-1-32

ESSEL SHYAM COMMUNICATION LTD Vs. UNION OF INDIA

Decided On January 06, 2000
ESSEL SHYAM COMMUNICATION LIMITED Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) This application (A.A. 181/99) under Section 11 of the Arbitration & Conciliation Act, 1996 (for short "the Act") seeks the appointment of an arbitrator under arbitration agreement (Clause 15 of the agreement).

(2.) Briefly, the facts are that in pursuance of its policy to licence private parties for providing "Value Added Service", a Licence Agreement dated 28.3.1995 to establish,maintain and operate Ctosed Users Group Domestic 64 KBPS Data Network via Insat Satellite System using VSAT (hereinafter called the service) throughout India under the Indian Telegraph Act was entered into between the President of India and M/s. Rama Associates Limited (for short "Rama") on the terms and conditions stipulated in the Agreement. This licence was on non-exclusive basis for a period of 10 years subject to being terminated earlier. The agreement contemplated inter alia (a) Clearance for Hub Station site from Standing Advisory Committee on Radio Frequency Altocations (SACFA), Ministry of Communication, (b)'Altocation of Required Space Segment in the Designated Transponder/Satellite and frequency, (c) Issuance of requisite Operational Requirement and Qualitative Requirement, and (d) Licence from Wire- less Planning and Coordination Wing (WPC), Department of Telecommunication permitting utilisation of appropriate radio frequency spectrum for the establishment and operation of the VSAT network. The licensee was to pay licence fee (1) @ Rs.50,000.00 Per V-SAT subject to a minimum of Rs. 1.00 crore per year in the first two years and Rs. 1.50 crores in the third year and thereafter .to be fixed; 10% of the licence fee was to be paid at the time of acceptance of Letter of Intent and for the balance 90% financial bank guarantee was to be given. 15% licence fee was to be paid prior to the dale of commission of service (2) fee for satellite space charges etc. and (3) performance bank guarantee of Rs. 50 lakhs.

(3.) In pursuance of the agreement, 10% licence fee was paid, for 90% a financial bank guarantee of Rs. 90.00 lakhs for the First year and performance bank guarantee in the sum of Rs. 50.00 lakhs were furnished. The Licensee was to establish a Hub after getting the site clearance from SACFA.' For that purpose, application was to be made within 4 weeks but the petitioner had submitted such application to SACFA on 20.7.1995 i.e. alter about four months, site chosen being at Gorai, Bombay. For want of Site clearance that site was abandoned by the licensee, intimation of which was given in November 1995. In the meantime, the petitioner selected another site at Noida and .submitted application for clearance of Hub site to SACFA on 26.9.1995. This site clearance is alleged to have been given belatedly on 2.6.1997. In accordance with the terms of the licence, initial deposit of Rs. 22.73 lacs was also paid on 24.4.1995 towards space segment reservation fee.