Editorial – November 2023

Usually companies are hyper vigilant about protecting their commercial interests. They would marshal facts and give no quarter while contesting claims, & proactively take steps that revenue is not taken away from them. But, not so BSNL. It acquiesces passively even to unjust claims, enfeebles its legal responses so that private vendors can walk away with precious revenue. This edition’s cover story narrates in detail how Vihaan Networks Ltd has recently received a Rs 58 crore Arbitration Award against Bharat Sanchar Nigam Ltd (BSNL) and the steps that it has taken to ensure its receipt even though there was no purchase order. Meanwhile, BSNL has done very little to protect its interest, a fact that has been repeatedly leveraged, quoted and recorded in the Arbitration Award.

The value of the Award is itself very high as our analysis shows. The matter pertains to an Advance Purchase Order (APO) issued by BSNL in 2018 to Vihaan for deployment of 2G towers in Arunachal Pradesh. It was a USOF funded project and BSNL was the executing agency. The project was disbanded because there were serious concerns related to the relevance of the outdated technology that was sought to be installed. Regulatory opinion was also very clear; Trai had labeled 2G as legacy. Debates raged, BSNL would not have been unaware of the untenable situations that the project would run into and yet it tied itself in knots and accepted PBG that Vihaan furnished, highly belated. The predictable happened. On September 11, 2019, USOF informed BSNL that Digital Communication Commission (DCC) has decided to float fresh tender on 4G technology. Terminations followed, BSNL cancelled the APO with Vihaan expressing regret.

Thereafter, Vihaan swung into filing claims. All that was done in the name of deployment were five trial sites and equipment thereof, the opex and capex for which was less than Rs 2 crore. But Vihaan highly overstated the claims, the details of which are presented in our cover story. That BSNL did not highlight these calculations before the Sole Arbitrator is intriguing. It did not do so even during cross-examination of claimant’s witnesses, which has been specifically pointed out in the Award.

BSNL’s challenge of the Award was thrown out by the Delhi High Court. Seven weeks later, BSNL has still so far not appealed against this dismissal. Whereas, on Vihaan’s petition for execution, the Court has directed BSNL to deposit the full amount with Registrar with interest in 8 weeks.