The tribunal admitted the petition which could potentially result in delaying RCom's plans to sell assets to lighten its debt load.
Ericsson has had 9,000 employees working on RCom and its subsidiaries and has not received RCom's unpaid dues despite many promises and re-negotiations on payment schedules.
RCom shares closed down 8.2 per cent on Tuesday in a broader Mumbai market that ended largely unchanged. On NSE, shares of the company slumped 15.72 per cent to close the day at Rs 10.45.
RCom can appeal the verdict with a tribunal in New Delhi. The company said, "RCom and two of its subsidiaries - Reliance Telecom and Reliance Infratel - await A detailed order from NCLT, allowing the Ericsson application for admitting the companies to debt resolution under the IBC". Last year, courtroom battles were one of the main reasons its merger deal with Aircel and the tower sale to Brookfield did not go through. If the company is sold under the insolvency process, Jio might have to clear a legal hurdle to bid for RCom. The rule is aimed at blocking back-door entry by delinquent owners.
Run by wealthy businessman Anil Ambani, RCom has said it plans to reduce its debt by selling assets such as airwaves, mobile masts and fibre optic investments.
Billionaire Mukesh Ambani's prospects for bailing out his younger brother's phone company are fading after an Indian tribunal put his sibling's Reliance Communications Ltd. into insolvency proceedings, which prohibit "connected persons" from acquiring assets of delinquent borrowers. Reliance Naval and Engineering (up 24.80 per cent), Reliance Power (9.45 per cent), Reliance Capital (5.15 per cent) and Reliance Infrastructure (4.58 per cent) were on a roll.
India never had formal bankruptcy rules until they were enacted into law in May of 2016. The law is now being tested through bitter court battles.