1. The Petitioner, Bharti Cellular limited (‘BCL’) [earlier known as Bharti Mobile Limited (‘BML’)], has in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the 1996 Act’) challenged an Award dated 20th December 2002 passed by the learned sole Arbitrator in the disputes between the Petitioner and the Respondent Department of Telecommunications (‘DOT’) arising out of a license agreement dated 26th December 1995 for provision of Cellular Mobile Telephone Service (‘CMTS’) in various telecom circles including Punjab. By the impugned Award the learned Arbitrator rejected the claim of BML for refund of the amount of license fee together with interest paid by it to the DOT subject to the finding that if the Telecom Disputes Settlement and Appellate Tribunal (‘TDSAT’) or in any further appeal/further proceedings, it was finally held that BML was not liable to pay interest for the period of 52 days, i.e., from 18th April 1996 to 11th June 1997 then the DOT would refund the said amount to BML.

Background facts

1. 2. Prior to 29th March 2000 BML was known as M/s. JT Mobiles Limited (‘JTM’). The name of JTM was changed to BML by a certificate dated 29th March 2000 issued by the Registrar of Companies (‘ROC’), Karnataka.

2. 3. On 16th January 1995, the Government of India through Ministry of Communications, DOT issued tender documents for CMTS in various telecom circles including Punjab. JTM was provisionally selected for providing CMTS in the telecom Circles of Punjab, Andhra Pradesh and Karnataka. Since the telecom service areas of Andhra Pradesh and Karnataka were proximate while that of the Punjab Circle was not, it was decided to implement the license agreement for the Punjab Circle by a separate legal entity. Accordingly, on 5th December 1995, a resolution was passed by the Board of Directors of JTM for implementation of the cellular licence for the Punjab Circle through its wholly owned subsidiary M/s. Ever growth Telecom Limited (‘EGTL’).

3. 4. A License Agreement was entered into between the DOT and JTM on 26th December 1995 for provision of CMTS in the Punjab Circle. The effective date was stipulated as 12th December 1995. A Board Resolution was passed by JTM on 10th January 1996 to the effect that CMTS license for the Punjab Circle be implemented through EGTL and JTM would maintain in EGTL not less than 20% equity or as agreed by the DOT. On 23rd January 1996 JTM requested the DOT to permit the implementation of CMTS in the Punjab Circle through EGTL along with a request to execute a fresh license with EGTL. On 26th March 1996 DOT asked JTM inter alia for details of the exact equity structure of EGTL including copies of the Memorandum of Association (‘MOA’) and Articles of Association (‘AOA’), certificate of incorporation etc. of EGTL. On 29th March 1996 EGTL wrote to the DOT confirming that EGTL was a

wholly owned subsidiary of JTM and its entire share capital was held by JTM. Copies of the MOA as well as AOA were enclosed. On 15th April 1996 JTM while confirming the DOT that EGTL was a 100% subsidiary of JTM sought permission to enable EGTL to raise further equity by private placements to third parties in future to meet project implementation costs. On the same date, i.e., 15th April 1996 JTM informed the DOT that it would hold not less than 24% equity in EGTL for the initial three years of the license. On 16th April 1996 JTM confirmed to the DOT that all foreign promoters of JTM were in agreement with the proposal of implementing Punjab CMTS licence through EGTL.

5. On 18th April 1996 the DOT wrote to JTM permitting operation of CMTS in Punjab Circle. The said letter reads as under:

“This has reference to your letters dated 23rd January 1996, 20th March 1996, 2nd April 1996, 15th April 1996 and 16th April 1996 regarding operation of Cellular Mobile Telephone Service (CMTS) through your 100% owned subsidiary, M/s. Ever growth Telecom Ltd. The Department of Telecommunications has no objec