The Japanese firm initiated arbitration proceedings, which ruled in favour of DoCoMo and fined the Tata Group USD 1.17 billion.
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Tata Sons, the Indian conglomerate’s holding company, owns a 29 percent stake in Tata Steel, which includes embattled United Kingdom steel units, and a 23 percent in Tata Motors, which includes the Jaguar Land Rover (JLR) brands in the UK.
DoCoMo in a statement said Tata Sons was citing Reserve Bank of India (RBI) not granting an exemption to the foreign exchange act to pay the money as an “excuse”. The award ordered Tata Sons to pay DoCoMo damages of about Dollars 1.72 billion for the Indian partner’s breach of the shareholders agreement, upon DoCoMo’s tender of its entire stake in TTSL to Tata Sons or its designee.
The Indian government plans to stop the payment of a $1.17 billion fine that Tata Sons was ordered to pay Japan’s NTT DoCoMo by an global arbitration court last month for breaching an India joint venture deal, Bloomberg reported.
Following this Docomo has obtained an exparte order from the commercial court in London to enforce the award in Britain.
“By definition that decision only relates to payment of hard currency out of India”.
However, if the arbitration award describes this payment as value for equity that is overdue then it may attract rules of the Reserve Bank of India, which govern all payments regarding buying and selling of shares of Indian companies.
Tata Sons also rejected reports suggesting the possibility of its United Kingdom assets being seized as a result of the ruling. “It follows that the award can not be enforced against those companies”.
However, a Tata spokesperson said: ” The arbitral award can not be enforced until the end of the 23-day period, or until any application made by Tata Sons has been finally decided upon.
“Further, the British assets of Tata Steel and Jaguar Land Rover are not owned by Tata Sons”.
Tata Sons has said it plans to deposit $1.2 billion with the Delhi High Court, which has given the companies until August 30 to resolve the issue. “This is in addition to legal action being undertaken by the company in India”, said the source close to NTT DoCoMo.
DoCoMo had made a decision to exit Tata Teleservices in 2014 as its JV’s performance was not up to the mark and had given Tata 90 days to find a buyer. Also Tata got the right of first refusal and it was mandated to shoulder the obligation to buy back the shares from DoCoMo if no other buyer could be found.
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The Japanese firm filed for arbitration on January 5, 2015 and it on June 23 this year won an award from the London Court of International Arbitration.
