The LCIA had earlier this year ordered Tata Sons to pay United States dollars 1.17 billion (over Rs 7900 crore) to Docomo for breach of contract on the grounds that it neither found a buyer nor bought back the Japanese partner’s 26 per cent stake in their telecom joint venture Tata Teleservices.
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In a statement, Tata Sons said it is ready to pay the partner, but within the constraints of the law.
Three months after Tata Sons was ordered to pay $1.17 billion fine to Japan’s NTT DoCoMo by an worldwide arbitration court, the company claims it is constrained by Indian regulators to make the payment.
The two companies are locked in a tussle over Tata Sons’s payment of $1.17 billion compensation to NTT DoCoMo for breaching an agreement over the duo’s wireless venture.
It also said that DoCoMo was prohibited from transferring its shares in Tata Tele to Tatas as the RBI had rejected the proposal. “We have been disappointed with the lack of cooperation from our partner in arriving at an amicable resolution”.
In April 2014, NTT DoCoMo had chose to sell its entire 26.5% stake in Tata Teleservices and exit India.
Sources said that following the ex-parte order from London’s Commercial Court in July, Tata Sons were granted some time to file their application to set aside the ex-parte order.
Japanese telecom firm NTT DoCoMo said that Tatas raising “objections” to the enforcement of the London Court of Arbitration (LCIA) award directly contradicted its statements of intent to meet the payment obligations.
Furthermore, in the absence of such approval, enforcement of the award would be unlawful under applicable Indian law and contrary to public policy, it added.
Under the terms of the shareholder agreement, Tata Sons had to find a buyer by December 2014, failing which it had to buy the Docomo stake.
“Tata Sons is committed to honouring our contractual obligations to NTT Docomo, in compliance with Indian regulations and law. The award by the LCIA is internationally recognised, including by India, and there is no reason to delay”, Docomo said in a statement. But the Indian Group offered Rs 23.34 a share in line with RBI guidelines that states that an worldwide firm can only exit its investment at a valuation “not exceeding that arrived at on the basis of return on equity”.
Tata Sons had contested the LCIA arbitration saying RBI does not allow it to buy back the 26.5% of Docomo’s shares at a pre-agreed value.
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The next hearing in the Delhi high court case is scheduled for 5 October.
