“Docomo notes Tata and Sons (Tata) commitment to honouring its contractual obligations and settle the London Court of International Arbitration arbitration award as determined unanimously by the distinguished panel of arbitrators appointed jointly by Tata and Docomo. Docomo also wishes that outcome,” said Docomo, which claims Tata Group owes $1.17 billion to it, in a statement.
NTT Docomo has invested $2.2 billion in Tata Teleservices in November 2008 to buy 26.5 percent stake. The three entities – Docomo, Tata Teleservices and Tata Sons – had signed agreement for the alliance in March 2009.
According to the agreement, Docomo had the right to sell its stake if Tata Docomo’s performance failed to meet the target. Also Tata got the right of first refusal and it was mandated to shoulder the obligation to buy back the shares from Docomo if no other buyer could be found.
In November 2014 Tata sought the approval of apex bank, Reserve Bank of India (RBI), to buy back the shares from NTT Docomo for $1.1 billion at half the price paid by them in 2009.
The central bank first gave nod to the deal in January 2015, but went back on the decision in March 2015 due to foreign exchange regulations.
Earlier this week, Tata Sons said it will deposit $1.17 billion with the Delhi High Court registrar by August 2. But it also has showed the court a new RBI letter issued on Monday that debunked the validation of the arbitration award in this particular transaction.
“The excuse for non-payment of the award which is alleged by Tata is the decision by the Reserve Bank of India earlier this week which was based on a mischaracterised application unilaterally made by Tata without first consulting its partner Docomo,” said the Docomo statement.
“By definition that decision only relates to payment of hard currency out of India. It cannot be used to block payment from funds or assets outside India nor can it prevent enforcement against such assets of Tata outside India. Docomo does not think that Tata Sons has in truth shown its willingness to make the payment,” it added.