India's Tata Sons Ltd. has been ordered to pay NTT DoCoMo Inc $1.2 billion to buy DoCoMo's stake in a joint venture, the Japanese firm said, citing an international arbitration court ruling.
In 2009, the Japanese telecoms group acquired a 26.5 per cent stake in Tata Teleservices Limited for around 127.4 billion rupees. In April 2014, it announced plans to exit the venture, which struggled to grow subscribers as quickly as its peers.
DoCoMo said it held the right to request that Tata find a buyer for its stake at 50 per cent of the original price or at fair market value, whichever was higher.
But Tata failed to find a buyer, and the central bank rejected Tata's offer to buy the stake, saying a rule change in the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
The Japanese company said in a statement the award was for Tata Sons' breach of their shareholders' agreement.
The decision comes at a time when Prime Minister Narendra Modi has promised to pursue predictable policies amid concerns that foreign investments are not adequately protected in Asia's third-largest economy.
