Home > companies > RBI said to seek to be heard in Tata-Docomo spat

RBI said to seek to be heard in Tata-Docomo spat

Docomo is seeking to enforce a London Court of International Arbitration order, asking Tata Sons to pay $1.17 billion for failing to uphold a contract

New Delhi/Mumbai: The reserve Bank of India (RBI) has sought to be heard on the battle underway in the Delhi high court between Tata Sons Ltd and its estranged partner NTT Docomo Inc., people with direct knowledge of the matter said.

NTT Docomo is seeking to enforce a London Court of International Arbitration order, asking Tata Sons to pay $1.17 billion for failing to uphold a contract. The Indian company says it cannot pay due to the nation’s foreign exchange rules, which are overseen by the central bank.

The court asked the Reserve Bank of India to make an application if it wants to be heard on the case, the people said, declining to be identified as the matter is sub-judice. RBI approval is not required to implement the London court’s order, according to a Docomo affidavit, the people said.

Also Read: Tata Docomo case: Why Delhi HC ruling is key for India’s FDI and tax rules

Docomo invested in Tata Teleservices Ltd in 2009 and, under the terms of the deal, has the right to request a buyer for its stake in the company at a fair market price or 50% of its acquisition cost, whichever is higher. Indian authorities say Docomo can only sell its stake at a “fair value." Accumulated losses at Tata Teleservices mean Docomo’s stake is valued at less than 50% of what it paid.

Tata has deposited $1.17 billion with the Delhi high court to show its intent to pay the amount, subject to Indian rules. Tata Sons declined to comment on the move by the central bank saying that the matter was sub-judice. A spokesman for Docomo didn’t immediately respond to an e-mail seeking comment on the issue. An RBI spokeswoman didn’t respond to an e-mail. The court will next hear the matter on 1 December. Bloomberg

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