BTRC seeks legal advice as GP, Robi want arbitration

Bangladesh’s telecom regulator is seeking legal advice on arbitration proposals from the county’s two largest mobile operators to resolve a dispute over Tk 13,447 crore in audit claims.

Grameenphone (GP) and Robi Axiata have formally asked the Bangladesh Telecommunication Regulatory Commission (BTRC) to consider alternative dispute resolution mechanisms to settle the cases. The regulator wants to know if there is a legal basis for it, what procedures would apply, and what the pros and cons might be.

The matter was discussed at a recent BTRC meeting, where officials reviewed a detailed working paper on the proposals. The Daily Star has obtained a summary of the document, where legal advisers suggest the path will not be easy.

ORIGIN OF THE DISPUTES

The claims date back to a 2019 BTRC audit. The regulator says the operators owe money for unpaid annual spectrum fees, value-added tax and revenue sharing.

Both companies dispute the amounts and deny evading any taxes, triggering a legal battle between them and the BTRC, with cases filed in 2019.

GP, the country’s largest telecom operator, faces the larger bill. Based on an audit covering 1997 to 2014, the BTRC sent the company a demand notice in April 2019.

According to the regulator, GP owes Tk 12,579.95 crore to the government, including dues payable to the BTRC and the National Board of Revenue (NBR).

The case remains unresolved nearly six years later.

In two letters to the regulator, GP proposed arbitration as a way out. The operator pointed to the slow pace of lower court proceedings, with little hope of a quick resolution even on appeal.

It also argued that complex technical issues could be better handled by experts in an arbitration tribunal.

The company has asked the BTRC to define the scope, process and conditions for arbitration.

Meanwhile, Robi Axiata, the second largest operator in the country, is contesting an audit claim of Tk 867 crore in unpaid revenues to the BTRC and NBR.

This case, too, has dragged on for nearly six years. Robi proposed mediation, arguing it would be faster and less adversarial.

However, BTRC documents show that if mediation fails, the dispute would move to arbitration anyway.

LEGAL ROADBLOCKS

The legal opinions cited in the BTRC document paint a difficult picture for both GP’s arbitration proposal and Robi’s mediation.

According to Justiciars, a law firm retained by the BTRC, arbitration under Bangladesh’s Arbitration Act of 2001 requires a valid and binding agreement between the parties.

Courts have already ruled that no such agreement exists between the BTRC and the operators, meaning there is no legal obligation to pursue arbitration.

The firm noted, however, that the parties could voluntarily agree to arbitration because of its advantages, namely speed and finality. Any such agreement would need to be narrowly focused on the specific dispute and must not interfere with other dispute-resolution mechanisms.

Another firm, the Capital Law Chamber took a harder line. It argued that the dues claimed by the BTRC arise from statutory obligations under the Telecommunication Act of 2001, making them non-arbitrable.

The firm cited section 89B of the Code of Civil Procedure, noting it is procedural and cannot render statutory disputes arbitrable.

The firm also pointed to Appellate Division orders from 2019 and 2020 requiring GP to deposit Tk 2,000 crore and acknowledging triable issues. This supports the case for judicial determination rather than arbitration.

Khaled Hamid Chowdhury, a panel lawyer and arbitration expert, echoed these concerns.

The disputes, he said, are public law matters and generally non-arbitrable. Any arbitral award could be vulnerable to challenge on public policy grounds.

Legal advisers offered similar views on Robi Axiata’s case, cautioning against arbitration or mediation and recommending continuation of the civil court process.

BTRC Chairman Emdad ul Bari said the matter is still under review. The commission has already taken some legal opinions and has decided to seek further advice before making a final decision.

GP PAYS BIG SUM

Of the total Tk 12,579 crore audit claims, GP has paid over 86 percent of the principal amount. However, it is yet to clear Tk 6,100 crore imposed as late fees.

During the previous government’s tenure, the BTRC and GP began negotiations over the unpaid late fees. Both sides were seeking an out-of-court settlement in early 2024.

However, the process collapsed after the government fell in August that year. Since then, the BTRC has stepped up efforts to resolve the matter.

In a recent interview with The Daily Star, GP CEO Yasir Azman said the company was interested in arbitration to settle the dispute.

“In our 28 years of operation, not a single annual audit dispute has been resolved,” he said.

The prolonged uncertainty, he argued, undermines investor confidence.

Azman said GP has Tk 12,500 crore stuck in financial disputes with the regulator, noting that such issues discourage foreign investors from continuing to invest.

As a way forward, he suggested pursuing international arbitration.

Otherwise, he warned, the disputes could remain stuck in court for another decade, increasing pressure on operators.

OTHER OPERATORS IN A SIMILAR BIND

The regulator also audited Banglalink, covering the period from 1996 to 2019.

In 2023, it asked the operator to pay more than Tk 820 crore. Of this, Tk 390 crore was for VAT, tax and other principal dues, while Tk 430 crore was claimed as late fees. Banglalink has already paid the principal amount and is seeking an out-of-court settlement.