The Company Law Board has allowed Unitech Ltd's plea to refer a dispute over its telecoms joint venture with Norway's Telenor for arbitration in Singapore, potentially delaying a resolution.

Telenor said in a statement it was "surprised" by the Company Law Board's order and would challenge it in a higher court, adding its intention remained to establish a new venture in India.

Telenor is seeking to scrap the joint venture and migrate its business to a new company to seek fresh operating licences, after the JV's telecoms permits were ordered to be revoked by the Supreme Court, which in February declared all permits awarded in a scandal-tainted 2008 sale "illegal and quashed".

Unitech has opposed Telenor's move and has said the Norwegian company cannot unilaterally scrap the joint venture agreement and that it had veto right to block any asset transfer.

Both sides had separately approached the Company Law Board over the dispute. Unitech last month appealed to the quasi-judiciary body to refer the case for international arbitration in Singapore, citing provisions in their shareholder agreement.

Unitech said in a separate statement on Thursday it was "pleased" by the Company Law Board's order and that their shareholders' agreement "clearly defines" a dispute resolution mechanism.

Telenor owns 67.25 per cent of the joint venture, which operates under the Uninor brand name, with Unitech holding the remainder. With 41 million customers at end-February, the JV ranks eighth in a market of 15 mobile carriers.

Shares in Unitech, a real estate company, rose as much as 6.3 per cent after the news.

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