The attorney general has stuck to his stance that foreign investors in mobile phone companies, whose licences were cancelled by the Supreme Court in its Feb 22 orders, can't sue the Indian government or claim damages under Bilateral Investment Protection Agreements (BIPA).
Aggrieved global investors, including Norway's Telenor, Russia's Sistema, Capital Global and Kaif Investment—both Mauritius based-investors in Loop Telecom, and Malaysia-headquartered Axiata Group, which owns about 20% stake in Idea Cellular, had served notices to the Indian government for alleged breach of bilateral investment protection agreements after the apex court quashed their mobile permits.
The ministry of external affairs as well as the commerce ministry had asked attorney general Goolam E Vahanvati to reconsider his August 8 stance, where he had said that 'alleged loss which emanates out of orders passed by the court does not constitute a cause of action against the government'.
The attorney general had further said that claim of damages from the Indian government by these companies was based on a 'complete misunderstanding of the constitutional position prevailing in the country', and pointed out that the legislature, executive and judiciary enjoyed separate powers.
The external affairs (MEA) and commerce ministries had not agreed to Vahanvati's opinion. The MEA said that Indian state was a single entity from the point of view of international law and therefore the conduct of any organ or authority was attributable to the state of India.
The commerce ministry had asked Vahanvati to take into account international law, particularly those relating to investment disputes. The commerce ministry had also pointed out that India had lost a case in 2011 where White Industries had sued the government under the Bilateral Investment Protection Agreement with Australia. Reiterating his stance, Vahanvati said that countries entering into bilateral agreements 'ought to have been fully aware of the constitutional set up of the country, where the Parliament has the powers to make laws, and the Government of India in its executive powers can enter into treaties'.
"The constitution of India has a clear demarcation of the respective jurisdictions of the various organs of State. It recognizes the principle of separation of powers. The judiciary exercises powers within its own sphere and under our constitutional setup the executive exercises no control over the judiciary. As such, the Government of India, cannot be held responsible for judgements of the Courts," Vahanvati said.