New Delhi: The Reserve Bank of India (RBI) on Tuesday moved the Delhi high court seeking a review of the joint application filed by Tata Sons Ltd and NTT Docomo Inc. regarding the enforcement of a $1.17 billion arbitration award.
Justice S. Muralidhar, however, was not keen on revisiting the issue, pointing out that both companies had agreed on a settlement and that the only issue to be decided was whether RBI saw any impediment in the transfer of money.
“We are asking you (RBI) specifically, do you foresee any impediment to the transfer of money under the arbitral award?” Muralidhar said. According to him, RBI could not act in the enforcement of a private award as that was not its primary role.
The court asked the banking regulator to submit any rule, regulation or circular by Wednesday to establish its stand on anything coming in the way of transferring money under the award.
The settlement terms, if approved by the court, will clear the way for the $1.17 billion already deposited by Tata Sons with the court to be paid to Docomo, and would allow Docomo to transfer its shares in Tata Teleservices Ltd.
On 28 February, Tata and Docomo informed the court they had reached a settlement on the Tata DoCoMo issue.
Subsequently, RBI opposed the consent terms.
Not satisfied with the reasons for its objections, given that neither Tata Sons nor Docomo had objected to the arbitral award, the court had given RBI time to bring on record any rules or circulars which could impede the transaction.
In April 2014, NTT Docomo had decided to sell its entire 26.5% stake in Tata Teleservices and withdraw from mobile telephony in India. Under the agreement between Tata and NTT Docomo, the latter had the right to request a buyer for its stake at a fair market price or 50% of its acquired price, amounting to Rs7,250 crore, whichever was higher.
In January 2015, NTT DoCoMo initiated arbitration proceedings against Tata Sons, claiming the latter had failed to fulfil its obligation to find a buyer for Docomo’s stake in Tata Teleservices.
A London tribunal had ordered the promoter of major Tata operating companies to pay $1.17 billion as compensation to NTT Docomo in June for breaching an agreement. Thereafter, Docomo filed an enforcement proceeding before the Delhi high court.
The hearing continues on Wednesday.