MODI KOREA TELECOMMUNICATIONS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) These are three applications under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the Act), praying for appointment of a sole arbitrator to resolve the disputes and differences, which are stated to have arisen between the parties, separately in each of the applications. Since the material facts and the issues arising for consideration are common, all the three applications are being disposed of by this common order.

(2.) . Shorn of unnecessary details, the facts of AA 117/01 shall be referred to as being illustrative. Sometime in the year 1994, the Department of Telecommunications, hereinafter referred to as the DOT, invited tenders for the purpose of introducing radio paging services in 18 different territorial circles of India. The tenderers were free to bid for all or any number of territorial circles. Tender submitted by the applicant company was accepted and accordingly it was awarded licence for the Madhya Pradesh circle. The letter of intent by the DOT was issued on 30/11/1995 and on 15/01/1996, a formal licence agreement was signed between the applicant and the DOT, granting licence to the applicant to operate radio paging services in the said circle, initially for a period of ten years. Condition 18 of the licence agreement inter alia, provided for payment of yearly (as equal quarterly instalments) licence fee with certain other stipulations contained therein. In terms of the licence agreement the applicant furnished the requisite financial and performance bank guarantees to secure regular payment of licence fee and due performance of obligations under the agreement.

(3.) . The applicant alleges that installation and commissioning of the project having been delayed on account of certain acts of omission and commission on the part of the DOT as well as other governmental organisations, it could not make payment of licence fees as stipulated under the agreement, whereupon, vide their letter dated 18/03/1997, the respondent invoked the financial bank guarantee for payment of Rs.42,20,924/- towards quarterly licence fee. Aggrieved by which, the applicant took recourse to various proceedings in this Court; before the Telecom Regulatory Authority and in the Supreme Court. However, ultimately, all interim orders passed initially in favour of the applicant were vacated concluding proceedings for encashment of bank guarantee, for reasons, not relevant for disposal of these applications.