Telenor’s dispute with its Indian partner Unitech took another turn yesterday, when it was reported that the Nordic-based operator group is planning to form a new entity in India and migrate its existing business, including customers and employees, to the unit.

According to Reuters, Unitech hit back with a statement noting that “the shareholders’ agreement cannot be terminated by any party unilaterally.” It also said that the existing contract includes a “non-compete” clause which Telenor would breach with its current plan.

Earlier this month, Telenor said that it was seeking compensation from Unitech, following a decision by India’s Supreme Court to cancel 22 licences used by the Uninor joint venture – which formed part of a wider cancellation of 122 permits issued in 2008. It said that the licence acquisition was undertaken by Unitech before it became involved, and that their validity was a “fundamental term” of the agreement between the companies.

Reuters said that Telenor will use the new company to bid for fresh licences, building on the assets it already has with Uninor. It is arguing that “fraud and misrepresentation” on the part of Unitech voids the shareholder agreement, enabling it to transfer the assets for their fair market value.

It was also said that Telenor will hold 74 percent of the new venture – presumably to comply with foreign ownership rules. It has not stated who its new local partner will be.