New Delhi: The Tata-DoCoMo spat over $1.17 billion payment dispute today took a fresh turn with Tata Group urging a London court to set aside an ex-parte order obtained by the Japanese firm for enforcement of an arbitral award against the Indian company.
On the other hand, DoCoMo -- citing the Indian company's filing in Delhi court on September 2 to block enforcement of the arbitral award -- charged the Tatas of attempting to "re-litigate arguments" that were already fully considered and rejected by the panel of London arbitrators appointed by the two companies.
"Tata Sons has today filed an application to set aside an ex-parte order obtained by NTT DoCoMo from London's Commercial Court on July 25th, 2016," Tata Sons said in a statement.
It may be recalled that DoCoMo had approached London's Commercial Court in July seeking enforcement of London Court of International Arbitration (LCIA) ruling against the Tatas for breach of contractual obligations pertaining to a shareholders' dispute in Tata Teleservices.
Following the ex-parte order from London's Commercial Court in July, Tata Sons were granted time to file their
application to set aside the said order. The latter has now moved the London Court on the same.
Sources in DoCoMo said that while the application had indeed been filed by Tatas in London's Commercial Court,
the Indian company had not filed justification of evidence to support the application. Tatas, claimed DoCoMo sources, have time till September 30 to file evidence in support of their application.
In a statement issued on Monday, DoCoMo asserted that it is in its own interest to take all appropriate steps to enable Tata to fulfil its payment obligations in India, and therefore "Docomo is open to any discussion with Tata and the Indian government to enable this".
Tatas have maintained that it is not permitted to pay the sum of $1.17 billion claimed by DoCoMo pursuant to the
award, since the regulatory approval by Reserve Bank of India has been denied.
In absence of such approval, enforcement of the award would be "unlawful under applicable Indian law and contrary to public policy", Tata Sons said.
Tata Sons further said it has always been committed to honouring its contractual obligations "within the framework of Indian law".
NTT DoCoMo in 2008 acquired 26.5 percent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per
share). This was as per a understanding that in case it exits the venture, it will be paid a minimum 50 per cent of the acquisition price.
When DoCoMo decided to exit the joint venture - that struggled to grow subscribers quickly - it sought Rs 58
per share or Rs 7,200 crore from the Tatas. But the Indian Group offered Rs 23.34 a share in line with RBI guidelines that states that an international firm can only exit its investment at a valuation "not exceeding that arrived at on the basis of return on equity".
The Finance Ministry had rejected a plea for exempting Tata-DoCoMo deal from the Foreign Exchange Act, saying that
the two firms had entered into a share buyback contract in contravention of prevalent law and the case would have to be settled legally.
In June this year, a London tribunal LCIA ordered Tata Sons to pay DoCoMo a sum of $1.17 billion in compensation
for breaching agreement on the India joint venture.
The Japanese firm has filed a plea in the Delhi High Court seeking enforcement of the arbitration ruling. Tata Sons has deposited the entire amount of $1.17 billion with the registrar of the Delhi High Court which is hearing the matter.
Published Date: Sep 06, 2016 07:45 AM | Updated Date: Sep 06, 2016 14:03 PM