. The ownership transfer case of Ncell, which has been in dispute for almost three years, has now reached the decisive stage. The Supreme Court (SC) has ruled that it is the responsibility of the Nepal Telecommunication Authority (NTA) to take the final decision on the sale and purchase of 80 percent shares of Ncell without immediately declaring it valid or illegal.

A division bench of Justices Sapana Pradhan Malla and Tek Prasad Dhungana dismissed the writ petition filed by Amresh Kumar Singh and directed the NTA to use its legal powers to settle the issue.TAG_OPEN_p_24

Axiata, at the centre of the dispute, on November 30, 2080, sold its 80 percent stake in Ncell to UK-based Spectrolite UK.TAG_OPEN_p_23 Nepal Telecommunication Authority (NTA) has not yet given formal recognition to the ownership transfer as required prior approval was not taken as per the Telecommunications Rules, 2054 BS.

According to the Telecommunication Regulation, approval of Nepal Telecommunication Authority (NTA) is required before buying or selling more than 5 percent of the paid-up capital of any telecommunication service provider.TAG_OPEN_p_22 Lawmaker Amresh Kumar Singh had filed a writ petition at the Supreme Court claiming that this provision was violated.

However, the Supreme Court has made it clear that the regulator has the authority to determine the legality of the transfer of ownership rather than the court.TAG_OPEN_p_21 The full text states that there is no need to issue a mandamus order or annul the agreement with the court when the authority is fulfilling its legal responsibility.

The court has not automatically validated the transaction. Rather, it has emphasized that the Authority should take necessary decisions by exercising its authority as per the Telecommunications Act, Regulations and Bye-laws.

The full text states that the Authority has the power to issue directives under Section 15 of the Telecommunication Act, to cancel the license under Section 28 and to impose a fine on the company violating the conditions as per Section 47. If it deems it necessary, the authority has left the way open for Ncell to take action or fine as per the law and then give legal recognition to the share trading or take other decisions.

The Supreme Court has given clear instructions to both Ncell and NEA in its order. The Authority has been asked to effectively regulate the licensed telecommunication service providers and take necessary steps to prevent the violation of the law. Similarly, Ncell has been directed to fully comply with the Telecommunications Act 2053, Telecommunications Rules 2054, Share Purchase and Sale Byelaw, 2076 BS and all the terms and conditions of the license.

TAG_OPEN_p_17 The final settlement of the dispute will depend on the decision of the Nepal Telecommunication Authority. After the court has determined the limits of legal interpretation, a situation has arisen for the NRA to use its authority to make a clear decision.

This dispute is not limited to Ncell’s ownership alone. Its impact is directly linked to Nepal’s telecommunications sector, foreign investment climate, regulatory credibility and investor confidence.

There are only three years left for Ncell’s telecommunication service operation license to expire. In such a situation, the ownership dispute remained uncertain for a long time, increasing uncertainty in the company’s future, potential investors and the entire telecommunications sector.

According to the Telecommunications Act, if more than 50 percent foreign investment is maintained in the company at the expiry of the license period, the related assets and structures will be owned by the government.TAG_OPEN_p_14 Ncell has been expressing dissatisfaction with this arrangement since the past. The company has been urging the government to review the regulations, claiming that the law has been implemented in a retrospective manner.

Ncell has also been making public time and again that it is ready to bring down foreign ownership below 50 percent by issuing initial public offering (IPO) if the government wants.TAG_OPEN_p_13 However, the government has not yet taken a clear policy decision on these issues.

After the full text of the Supreme Court, one thing has become clear: the ownership dispute of Ncell is no longer in the court, but depends on the decision of the regulatory body. If the Nepal Telecommunication Authority (NTA) can take a clear decision using the authority given by the law, then this much-talked-about dispute that has been in confusion for three years will finally come to a conclusion.