Tata Sons Ltd has filed an affidavit with the Delhi high court on Friday objecting to the enforcement of an arbitration award by the London Court of International Arbitration, said a person familiar with the matter.
The affidavit said that Tata Sons resists the enforcement of the arbitration award since it contravenes Indian laws and public policy, the person added.
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 over their telecom joint venture. Thereafter, DoCoMo filed an enforcement proceeding before the Delhi high court.
On 29 July, Tata Sons said it had that it had deposited the $1.17 billion (Rs7,800 crore in Friday’s exchange rate) in a fixed deposit favouring the Delhi high court registrar after the Reserve Bank of India denied its request to remit the money to DocoMo.
At that time, the court had given both companies time till 30 August to try and resolve outstanding issues.
That doesn’t seem to have happened.
“The fact that Tata has raised objections to the enforcement of the London Court of Arbitration (LCIA) award directly contradicts its statements of intent to meet its payment obligations. The award by the LCIA is internationally recognised, including by India, and there is no reason to delay,” said an emailed statement from DoCoMo.
Tata Sons declined to comment.
The fight between the Tatas and NTT DoCoMo dates back to January 2015 when the Japanese company placed a request for pursuing arbitration proceedings against Tata Sons, claiming the latter failed to fulfil its obligation to find a buyer for DoCoMo’s stake in Tata Teleservices Ltd.
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 Japanese firm’s agreement with Tata Sons, it 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. That would have meant a higher price than what is allowed under current rules which state that foreign companies can only exit investments at a valuation based on the return on equity.