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Vodafone is reserving the right to walk away from its planned purchase of a controlling stake in Hutchison Essar, India’s fourth largest mobile operator, if litigation seeking to thwart the deal is launched.

A document filed with regulators by Hutchison Telecommunications International Limited, the Hong Kong listed company that has agreed to sell its stake in Hutchison Essar to Vodafone, reveals that the UK mobile group has sought to protect itself against the risk of protracted litigation.

The document summarises the sale agreement between HTIL and Vodafone, and it reveals how they would delay completion of the deal, or even abandon it, if legal action was launched.

Vodafone announced on Sunday that it was buying companies that control a 67 per cent stake in Hutchison Essar from HTIL. Vodafone has agreed to pay $11.1bn (£5.7bn).

Last night Vodafone declined to comment. But people familiar with the matter highlighted how Essar, the Indian conglomerate that owns 33 per cent of Hutchison Essar, has been threatening legal action to enforce what it claims is a right of first refusal. Essar has repeatedly said it is entitled to the opportunity to buy the stake in Hutchison Essar held by HTIL.

Arun Sarin, Vodafone’s chief executive, said on Sunday that Essar did not have a right of first refusal against the UK group’s planned purchase.

On Tuesday he repeated his preference that Essar be Vodafone’s partner in Hutchison Essar. Essar said on Sunday it was considering the invitation.

The document filed with Hong Kong regulators says the Hutchison Essar deal between HTIL and Vodafone may be completed on April 2 2007. However, it adds that if a court injunction seeking to frustrate the deal was obtained before that date, the transaction would not be concluded until after it was lifted.

“The [sale] agreement provides for certain termination rights arising as a result of circumstances tied to the existence of a [court injunction],” says the document filed with regulators.

People familiar with the matter said these details meant Vodafone could walk away from its planned purchase.

Tensions continue between HTIL and Essar. People with knowledge of the situation said Essar was still waiting for HTIL to give it the option to either exercise its right of first refusal, or sell its 33 per cent stake. These people said Essar wanted HTIL to abide by processes for a sale of Hutchison Essar outlined in an agreement between them. Other people familiar with the matter said they expected Essar to sell its 33 per cent stake.

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