New Delhi: Tata Sons Ltd, the holding company of Tata Group, on Wednesday sought more time to respond to a Reserve Bank of India (RBI) application seeking to be heard in the Tata-NTT Docomo dispute before the Delhi high court.
“Will seek instructions on the issue so that there is no ambiguity,” said Darius Khambatta, senior advocate representing Tata Sons.
Docomo moved the high court earlier this year to enforce an arbitration award of $1.17 billion that Tata Sons, holding company of the Tata Group, was required to pay to the Japanese phone services provider as compensation for its stake in Tata Teleservices Ltd.
On 1 December, justice S. Muralidhar of the high court had issued notices to both the parties on RBI’s plea filed in October to intervene in the case.
Under the terms of the shareholder agreement between Docomo, Tata Teleservices and Tata Sons, Docomo had the option to request that a suitable buyer be found to purchase its Tata Teleservices shares for 50% of the acquired price, amounting to Rs7,250 crore (or 125.4 billion yen), or a fair market price, whichever is higher.
RBI and the finance ministry had said that such a payment would violate foreign investment rules.
The court is to decide whether the arbitral award can be enforced in spite of RBI and the finance ministry’s refusal to allow Tata to pay the Japanese company. Tata had claimed that the award is violative of the fundamental policy of India, a valid ground for it to be set aside.
Tata Sons declined to respond to an email query.
The case will be heard next on 2 February.