Anil Ambani’s Legal Dispute with Swedish Firm Resurfaces After 6 Years, RCom Claims Rs 550 Crore

Swift Summary

• Legal Battle Resumes: Anil Ambani’s Reliance Communications Ltd (RCom) has restarted a legal battle with Swedish telecom company Ericsson after nearly six years, seeking a refund of Rs 550 crore paid in 2019 following a Supreme Court order.
• Claims of Preferential Treatment: RCom’s resolution professional argued that the payment amounted to preferential treatment since Ericsson,as an operational creditor,received full payment ahead of secured financial creditors during bankruptcy proceedings.
• ericsson’s Response: Ericsson’s counsel dismissed the plea as frivolous and emphasized it was made under Supreme Court directives. The case will continue with hearings scheduled for June 11 and 12 at the Mumbai bench of National Company Law Tribunal (NCLT).
• Background Details:

– In 2013, Ericsson inked an agreement to operate RCom’s telecom network but later filed for insolvency due to unpaid dues.
– After prolonged legal disputes, in 2019 RCom paid Rs 550 crore but went into bankruptcy shortly afterward.
– Deloitte was appointed as resolution professional and subsequently sought refunds on similar grounds.Read More

Indian Opinion Analysis

The renewed court battle underscores broader challenges in India’s insolvency laws concerning creditor hierarchy during liquidation. While the payment made by RCom followed Supreme Court directives under Article 142 of the Constitution-a decision frequently enough used for equitable remedies-it raises critical questions about whether such settlements could be reconsidered within insolvency frameworks post-liquidation claim adjustments.This case reflects systemic tension between safeguarding operational creditors’ rights while maintaining fairness toward secured financial entities in bankruptcies-both vital stakeholders for corporate debt restructuring ecosystems.Regardless of eventual outcomes,clarity on preferential treatment under India’s Insolvency and Bankruptcy Code might emerge from this dispute.Such precedence could enhance clarity and reduce ambiguity in future insolvencies across sectors.