Tata Sons has formally announced that it has reached an agreement with NTT DoCoMo of Japan, its joint venture partner in Tata Teleservices Ltd., for an out-of-court settlement of their dispute.
“In the larger national interest of preserving a fair investment environment in India, we have reached an agreement with NTT DoCoMo on a joint approach to enable enforcement of the June 22, 2016, London Court of International Arbitration (LCIA) award,” a release said.
“As a gesture of good faith and in accordance with the Tata group’s long-standing record of adherence to contractual commitments that it has always enjoyed both in India and abroad, the board of Tata Sons has decided to withdraw its objections to the enforcement of the award in India,'' the release said.
The two had jointly applied to the Delhi High Court, requesting that it accept their agreed terms of settlement, subject to such further orders as the court sees fit.
The settlement terms, if approved by the Delhi High Court, would clear the way for the $1.18 billion already deposited by Tata Sons with the Delhi High Court to be paid to NTT DoCoMo, the release said. It would also allow DoCoMo to transfer its shares to Tata Teleservices Limited.
“As part of this joint application, and in anticipation of the matter being finally resolved in India, DoCoMo has agreed to suspend its related enforcement proceedings in the United Kingdom and the United States for a period of time,” the release said.
The move for an amicable resolution of the issue is hailed by C. Sivasankaran of the Sterling Group, who had also invested in the shares of Tata Teleservices.
“I welcome the settlement. I am happy. And, I am looking forward that this will pave way for Tata Sons to have a similar agreement with other shareholders who have pledged their shares with banks. This move will do a lot of good,” he said.
In 2009, DoCoMo acquired 26.5 % stake in Tata Teleservices. The two also agreed on a clause at that time that allowed the Japanese firm to exit the venture at a pre-determined minimum price. The Reserve Bank of India, however, felt that such an exit could happen only at fair market value in tune with an amended rule in 2013. Since then, the dispute between the two has become a legal war.
The DoCoMo dispute and the alleged favours shown to Mr. Sivasankaran have all become a subject matter of high voltage spat between former Chairman of Tata Sons Cyrus Mistry and Rata Tata. Eventually, it culminated in the ouster of Mr. Mistry as the Chairman of Tata Sons. Much water has flowed since then, and the latest accord with DoCoMo comes just within days of Tata Sons having a new Chairman.
