Pedestrians walk past advertisements for Reliance Communications Ltd.’s Reliance Telecom. (Photographer: Prashanth Vishwanathan/Bloomberg)

Supreme Court Directs Reliance Communications To Pay Ericsson By Dec. 15

The Supreme Court today asked Reliance Communications Ltd. to clear the dues of Rs 550 crore to telecom equipment maker Ericsson India by Dec. 15, saying that delayed payment would attract an interest of 12 percent per annum.

A bench headed by Justice RF Nariman said that this would be the last opportunity given to RCom for clearing the settlement amount. It said that Ericsson can revive its contempt plea against Reliance if the settlement amount is not paid by Dec.15.

Senior advocate Kapil Sibal, appearing for RCom said that the company had been waiting for the Department of Telecommunications’ approval to sell its spectrum, following which it will pay Ericsson. Senior advocate Dushyant Dave, appearing for Ericsson said that the argument of Reliance is a “complete bogey”.

Ericsson’s had filed a plea in the apex court seeking contempt action against RCom Chairman Anil Ambani and others for failing to pay Rs 550 crore towards settlement to the company by September end.

The company had alleged that RCom had "wilfully and consciously" defied the top court’s Aug. 3 order and the undertaking given before it to pay by September end. It has sought initiation of contempt proceedings against RCom top officials including Ambani.

"They have no respect for the law of the nation and have abused the due process of law," the plea said.

Also read: Ericsson Seeks Contempt Of Court Proceedings Against RCom

The apex court had approved the settlement between RCom and Ericsson India Pvt Ltd over a payment dispute and asked the telecom company to pay Rs 550 crore to the Indian arm of the Swedish firm by Sept. 30.

Ericsson India, which had signed a seven-year deal in 2014 to operate and manage RCom's nationwide telecom network, had alleged that it had not been paid the dues of over 1,500 crore and challenged the debt-ridden firm before National Company Law Appellate Tribunal.

The Supreme Court had perused the May 30 interim order of the NCLAT and noted that Ericsson India was willing to settle its debt of over Rs 1,500 crore for a sum of Rs 550 crore which was to be paid by RCom within 120 days.

On Aug. 3, the supreme court had allowed RCom to sell assets covering spectrum, fibre, telecom towers, MCNs and certain real estate assets, for an aggregate value of approximately Rs 25,000 crore.

Also read: Crunch Time Comes for Reliance Communications Debt Restructuring