India is facing potential treaty claims from member companies of Malaysian satellite TV group Astro which has been targeted by a criminal prosecution linked to the country's 2G spectrum scandal.
The Malaysian-based Astro group of companies, which does not operate in India's mobile market but has been under investigation in connection with the 2G scam since 2011, has sent India a notice of dispute, according to media reports.
Astro Holdings in Kuala Lumpur, UK-based Astro All Asia Networks (AAAN) and South Asia Entertainment Holdings in Mauritius have each sent India the notice of dispute between July and August last.
The dispute relates to criminal proceedings concerning the claimants' investments in Sun Direct TV, a direct-to-home television operator owned by AAAN and the brother of India's former telecom minister Dayanidhi Maran.
Indian authorities allege that the Astro companies' investments in Sun Direct TV were kickbacks in favour of the Maran family in return for facilitating the takeover of India's fifth-largest mobile operator, Aircel, by Malaysia's Maxis Communications in 2005. Prosecutors maintain that Astro and Maxis are ultimately owned by the same Malaysian billionaire, Ananda Krishnan.
India's Criminal Bureau of Investigation (CBI) filed criminal charges in August last year against Krishnan, AAAN, South Asia Entertainment Holdings and Sun Direct TV — as well as Maxis and its former director Ralph Marshall.
The companies have invoked the 1998 Mauritius-India bilateral investment treaty (BIT), the 1994 UK-India BIT, and the 1995 BIT between Malaysia and India, respectively.
The Astro companies say they have been unfairly implicated in the 2G spectrum scam. In their notices of dispute, the Astro companies allege among other things that India has breached the BlTs' fair and equitable treatment provisions through the failure of state authorities to conduct a fair investigation.
All the BlTs invoked by the Astro companies provide for a six-month cooling-off period that will expire around December. Damages have not been specified, though media reports suggest the claimants invested around US$209 million in THE Sun Group.
It is not the first time that India has faced claims relating to the 2G scandal. Indian-owned Khaitan Holdings Mauritius lodged a US$1 4 billion claim in 2013 over its investment in Indian mobile operator Loop Telecom, which lost 21 licences as a result of a 2012 decision by the Indian Supreme Court.
Norway's Telenor and Russian conglomerate Sistema also issued notices of dispute over the cancellation of their licences but ultimately chose not to go to arbitration.
India has not yet retained external counsel for the Astro dispute.