Anil Ambani’s legal battle with Swedish firm returns in court after 6 years, RCom seeks Rs 550 crore from…

Anil Ambani’s Reliance Communications Ltd (RCom) legal battle with Sweden’s Ericsson has returned in court after nearly six years. The Ambani company is seeking a refund of Rs 550 crore from Swedish telecom equipment maker Ericsson. RCom paid the amount to the Swedish firm in 2019 after a Supreme Court order. On Thursday, the Mumbai bench of National Company Law Tribunal (NCLT) heard RCom resolution professional’s petition that the Swedish company is an operational creditor, and paying it first while financial creditors wait would be a case of preferential treatment, as per a Mint report. RCom and its two subsidiaries — Reliance Telecom and Reliance Infratel — had paid Swedish telecom equipment maker Ericsson Rs 550 crore in 2019.

During a brief hearing at the Mumbai bench of NCLT, Ericsson’s counsel termed the plea ‘frivolous’. The insolvency court said it will decide next month on bankrupt telco RCom’s plea. The tribunal has directed both parties to file their responses and listed the matter for hearing on 11 and 12 June, the report added. The bankrupt company (RCom) now argues that the payment amounted to preferential treatment, since Ericsson is an operational creditor and received full payment ahead of secured financial creditors.

In a court petition this week, RCom’s resolution professional, Anish Nanavaty of Deloitte, said the payment to Ericsson amounted to a “preference” as it had “the effect of putting the respondent (Ericsson) in a beneficial position vis-a-vis the other creditors of the corporate debtor (RCom) in the event of distribution being made under liquidation of the corporate debtor”. “The demand for refund is an abuse of process of law inasmuch as the settlement and undertaking was in an order passed by the Supreme Court under Article 142 of the Constitution of India,” Anil Kher, senior advocate representing Ericsson, earlier told Mint.

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Ericsson vs RCom case

In 2013, Ericsson had signed a deal with RCom to operate its telecom network. But after RCom failed to pay Ericsson, it filed an insolvency petition in the NCLT. RCom filed for bankruptcy in 2019, and Deloitte was appointed as the resolution professional. Ericsson won its dues after a court battle the same year. After payment deadlines were missed, Ericsson filed a petition in the Supreme Court against RCom’s former chair Anil Ambani and the company’s units. 

Later in 2019, Deloitte filed a petition before the NCLAT seeking a refund from Ericsson on grounds of preferential payment. The appellate tribunal directed the parties to approach the NCLT’s Mumbai bench, which is now hearing the matter afresh.