 "DoCoMo files response to Tata's objection to arbitration award")
NTT DoCoMo filed its response in the Delhi High Court on Wednesday, against a Tata Sons objection to the enforcement of a $1.17 billion London Court of Arbitration (LCIA) award in favour of the Japanese telecom giant.
Tata had on September 2, filed an affidavit objecting to the enforcement of the international arbitral award, after initially expressing its willingness to comply with the determination and submitting the entire adjudicated sum with the registrar of the high court.
According to DoCoMo, Wednesday’s response comprehensively tackles the objections that Tata has raised to the enforcement of the June 22 international arbitration award in India.
“DoCoMo trusts that the Indian court will acknowledge its obligation to enforce the award, and with this confirmation DoCoMo hopes that Tata will work with it to enable payment of the amount due,” said DoCoMo in an official statement.
The arbitration award in favour of DoCoMo, is the fallout of a two-year old scuffle between the two companies regarding their unsuccessful joint venture Tata Teleservices, in which the Japanese company holds a 26 per cent stake.
As per the initial agreement, DoCoMo had been given the option of exiting the collaboration after a three-year time period, at a predetermined share price. DoCoMo’s stake was to be bought by Tata or an external buyer, which the Indian entity was to organise.
In 2014, after the venture failed in generating the desired returns, DoCoMo decided to exercise its exit option, at a time when the price of Tata Teleservices shares had plunged far below the earlier decided exit amount.
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Incapable of finding an external buyer, Tata had made an application to the Reserve Bank of India to acquire the DoCoMo holding themselves, as previously agreed upon. The regulator refused the application at the time, citing that such a transfer could not be made at predetermined share prices on a subsequent date, under prevalent Indian regulations.
The deadlock culminated in the international arbitral proceedings that followed, resulting in the $1.17 billion award now sought to be enforced against Tata.
“We are yet to examine Docomo’s response. We reiterate our earlier position that enforcement of the award in the absence of RBI’s approval would be violative of FEMA (Foreign Exchange Management Act 1999) and therefore any action towards implementing the award – whether in India or overseas – would be unlawful and against public policy,” a Tata Sons spokesperson said on Wednesday.
Tata however, also made an appeal to their joint venture partner, to join them in engaging with the authorities to reach an amicable resolution in the issue.