The long, drawn-out legal battle between telecom equipment maker Ericsson and debt-ridden mobile phone service provider Reliance Communications (RCom) has taken a new twist with the Swedish firm filing a contempt of court petition against the chairman of the State Bank of India (SBI) in connection with the ongoing payment dispute with the Indian company.
Ericsson filed the petition in the Supreme Court in India, claiming the bank had not fulfilled its duty in settling RCom’s dues as the lead banker, Economic Times reports. SBI was lead banker in RCom’s asset monetization plan to pare down its debt of 420 billion rupees (US$5.87 billion) by selling its wireless assets to Reliance Jio Infocomm and a land parcel to Canadian firm Brookfield. The bank had also been a co-petitioner requesting the courts allow the sale of RCom assets.
The Swedish firm also filed its third contempt petition against RCom Chairman Anil Ambani in the Supreme Court, calling for a freeze of his personal assets and baring him from leaving the country as they claimed he had disobeyed court orders multiple times. It also sought to add RCom units Reliance Telecom and Reliance Infratel as parties. The Supreme Court listed matters related to Ericsson and RCom for February 12.
Ericsson’s move comes after RCom on Monday approached the National Company Law Appellate Tribunal (NCLAT) to withdraw its appeal in a dispute with Ericsson as it seeks to pursue a debt resolution plan through the country’s bankruptcy court. The NCLAT asked Ericsson to file a response by February 8 and scheduled a hearing for February 12.
The Swedish company sees this as a move by RCom to dodge paying 5.5 billion rupees ($76.84 million) as directed by the Supreme Court.
Ericsson had already filed two contempt petitions against Ambani for repeatedly failing to pay the dues despite Supreme Court deadlines of September 30 and December 15. Apart from Ericsson, RCom has to clear the dues of 39 lenders. The company was forced to shut its wireless operations in 2017 as it was weighed down by debts, falling revenue and widening losses. Ericsson was operating and managing RCom’s telecom network across India.