The Delhi High Court today reserved its verdict on Japanese telecom major NTT Docomo’s plea to enforce the $1.17 billion damages awarded to it for breach of contract by Tata Sons with regard to their joint venture Tata Teleservices Ltd (TTSL).
Justice S Muralidhar in his judgement will also decide whether the intervention application of the RBI, opposing the award as well as the settlement arrived at between Tata and Docomo, was maintainable.
The court as well as Tata and Docomo were of the view that only those who were party to an arbitration can object to the award.
The court questioned the maintainability of the RBI’s plea to intervene in the matter when it was not a party to the arbitration between Tata and Docomo.
Docomo and Tata had gone for arbitration as the Indian company was not able to find a buyer for the Japanese telecom major’s 26.5% stake in their joint venture, Tata Teleservices Ltd (TTSL), when it exited from it.
Under the shareholding agreement between them, on Docomo’s exit from the venture within five years, Tata was to find a buyer who would purchase the Japanese company’s stake at minimum 50% of the acquisition price, which came to around Rs 58.45 per share.
The other option was Tata purchasing the shares at fair market value, which was Rs 23.44. However, this was not acceptable to Docomo and it had opted for arbitration.
Thereafter, the London Court of International Arbitration (LCIA) in June 2016 had awarded damages of $1.17 billion in favour of Docomo for Tata’s inability to find a buyer as per the shareholding agreement.
Docomo had moved the Delhi High Court for enforcement of the award after Tata cited refusal of permission by the RBI to make the payment.
The RBI, during today’s arguments, contended once it denied permission for transferring the money overseas, the issue had attained finality. It said that till date its decision has not been challenged.