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A timeline of Reliance Communications versus Ericsson case

Reliance Communications on March 18 repaid Ericsson's dues of Rs 462 crore.

March 18, 2019 / 10:08 PM IST
 
 
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Here's a timeline of the Reliance Communications versus Ericsson case.

2013 - RCom signs MSA with Ericsson

Reliance Communications (RCom) signs a multi-year managed services agreement (MSA) with Ericsson in January. Under the deal, Ericsson to manage services of wireline and wireless network for RCom covering more than 100,000 km of fiber and mobile infrastructure in 11 telecom circles, across North and West of India including Delhi and Mumbai.

2016 -- Relations sour on non-paid dues

The relationship between the two companies stays smooth for about three years, but 2016 onward things start to sour as RCom struggles to pay Ericsson on time. Ericsson alleges Reliance defaulted on payments, even after several assurances.

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September 2017 - Ericsson terminates MSA, approaches NCLT

Ericsson issues notice for termination of the MSA, stating that RCom breached the agreement by not paying its dues. In the same month, Ericsson approaches the Mumbai bench of the National Company Law Tribunal (NCLT) to recover dues worth over Rs 1,100 crore from RCom.

May 2018 - NCLT initiates insolvency, RCom agrees to pay Rs 550 crore

NCLT accepts a petition of Ericsson and initiates insolvency proceedings. This comes at a time when RCom is trying to sell spectrum, towers and fiber assets to Reliance Jio, the company owned by Ambani’s older brother Mukesh Ambani for $3.7 billion to reduce the $7 billion debt load on its books.

On May 29, RCom offers an upfront payment of Rs 550 crore to Ericsson, as a settlement, on condition that Ericsson withdraws the insolvency application. Anil Ambani gives a personal guarantee for the payment to Ericsson.

August 2018 - Matter reaches Supreme Court

On August 3, the matter reaches the Supreme Court which orders RCom to pay Rs 550 crore to Ericsson towards the dues by September 30.

Sept-Oct 2018 -- RCom fails to comply, Ericcson files a contempt petition

RCom misses the September 30 deadline and seeks an extension of the deadline by 60 days from Ericsson. Ericsson refuses and files contempt of court petition in the Supreme Court against Anil Ambani. RCom moves the court for an extension of the deadline, but the plea is dismissed.

February 2019 - Supreme Court sets March 19 deadline to pay

The Supreme Court holds Anil Ambani and three RCom companies guilty of contempt of court for not complying with the undertaking to settle the Rs 550 crores dues of Ericsson.

The Court grants an opportunity to Anil Ambani to overcome contempt by paying Ericsson the balance amount after deducting the Rs 118 crore already deposited in the Court.

The Court sets March 19 as the deadline and says a default would result in Ambani facing three months imprisonment.

March 2019 - Anil Ambani pays Rs 462 crore, avoids a jail term

Mukesh Ambani bails out his younger brother by providing a Rs 462 crore lifeline. Anil Ambani pays the final instalment just a day before the Supreme Court deadline and avoids a potential jail term.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
first published: Mar 18, 2019 10:08 pm

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