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FLAG returns to global tribunal

August 31, 2006 17:14 IST

Reliance Communications-owned FLAG Telecom has re-approached an international tribunal seeking damages and determination of  reasonable and cost-based access charges from Videsh Sanchar Nigam Ltd.

This comes as the two companies failed to reach an agreement on FLAG's access to the submarine cable landing stations owned by VSNL, within the three months period given by the International Court of Arbitration of International Chamber of Commerce's.

In a notice to stock exchanges, Reliance Communications said the failure of the negotiations would harm ITeS and BPO companies in the country due to the high bandwidth prices and landing station access charges maintained by VSNL.

FLAG says VSNL is refusing to negotiate landing station access charges in good faith and on basis of costs incurred.

"Since the 90 days period permitted by arbitration award for negotiations is over, FLAG has approached the tribunal for setting a time table for determination of damages due to the unlawful refusal of VSNL to grant access to FLAG from 1998 onwards," Reliance Flag said.

VSNL on its part said, "VSNL is fully compliant with the tribunal's award. VSNL believes that its commercial proposals related to access charges are fair and reasonable."

The access charges on the FLAG system are based on mutually negotiated commercial terms between VSNL and Flag. The ICC Tribunal, in its award, has not found any issues with the access charges as already negotiated between VSNL and Flag, industry sources said.

Earlier, FLAG Telecom had received an order in its favour, with the International Court of Arbitration of ICC asking VSNL to allow access to FLAG Europe Asia cable landing station.

The tribunal had also permitted FLAG to upgrade capacity on FEA system at its Mumbai landing station.

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