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Mumbai, July 19 Reliance Industries (RIL) will not withdraw the arbitration process it has initiated against Reliance Communications (RCom) even though the RCom-MTN talks have been called off, sources close to the disputing parties indicated.

The talks may have been called off, but RCom’s intent to disregard the validity of what RIL holds as its Right of First Refusal remains the issue, said sources close to RIL. This would indicate that RIL wants to stall any such stakes sale by RCom in the future.

The arbitration process can, of course, move ahead only if RCom agrees to be a party to it. RIL has already nominated an arbitrator for disputes with RCom which would have to appoint its own arbitrator. The procedure then calls for a third arbitrator acceptable to both parties.

The Anil Ambani camp said the January 12, 2006 non-compete agreement has no binding on RCom or any other group company. AAA Communications (which is the promoters’ investment vehicle holding 63.38 per cent equity in RCom) is not party to any “alleged non-compete Agreement”, a statement from the group said.

There is speculation that AAA Comm itself may resume talks with MTN since the “alleged ROFR” is only between RIL and RCom, said sources.

Earlier, RCom said that RIL’s reference to the January 12, 2006 agreement was misleading as the Anil Ambani-led company had written to RIL on the same day (Jan 12, ’06), rejecting the “unilateral procedure adopted for finalising such an agreement.”

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