DoCoMo's hard line hurdle for settlement, say Tatas

Tatas losing Rs 2 crore a day as it deposits $1.17 bn with Delhi HC

NTT DoCoMo's hardline approach and continuous litigation in courts in India and the United Kingdom was blocking any settlement with the Tatas over the former's exit from Tata Teleservices, the loss-making joint venture between the two companies.

According to legal sources directly involved in the talks, the Tatas have asked DoCoMo to approach the Indian government to settle the matter "once and for all" but the Japanese company has refused to do so.

"We are losing Rs 2 crore a day and have already lost Rs 60 crore in interest for the amount ($1.17 billion, or about Rs 8,000 crore) deposited with the Delhi High Court. We are more than willing to settle this issue," said a source close to the Tatas, asking not to be named. "We asked for a standstill agreement to settle the matter but DoCoMo is adamant."

But a source in DoCoMo said the Tatas have asked them to first withdraw cases filed in the Commercial Court in United Kingdom before they can initiate any settlement talks.

Soon after winning a favourable arbitration award in June this year, DoCoMo moved the Commercial Court in London in July to enforce the award. DoCoMo threatened to attach British properties owned by the Tatas.

In July, DoCoMo moved the Delhi High Court to enforce the arbitration award.

"We can lay a claim on payments to be made by any foreign companies to Tata companies such as TCS, according to UK laws," said a source in DoCoMo on Tuesday. "The Tatas have their brand name to protect globally and should not go back on agreements made earlier."

The Tatas, however, said DoCoMo cannot attach Tata properties in the UK as Tata Sons, the holding company of the group, is a minority shareholder in Tata Steel and Tata Motors-JLR - its two operating companies.

Tata Sons, however, is a 74-per cent stakeholder in TCS that earns a substantial revenues from overseas.

The tussle between the two relates to Docomo's exit price from Tata Teleservices under which the Tatas were to buy back Docomo's 26.5 per cent stake at 50 per cent of its 2009 acquisition price. But a change in foreign exchange law in 2013 bars any pre-determined valuation of shares.

A valuation of Tata Teleservices shares done by the Tatas in 2014 pegs the fair value of each share at Rs 23.34 as compared to Rs 58 a share determined as per the 2009 agreement.

The Tatas say they cannot remit they money from India as the RBI has disallowed its application twice. "We want Docomo to come with us to the regulators and present our case jointly. But Docomo has so far refused to do," said a source close to the Tatas.

Docomo says they have a strong case against recovering its amount from the Tatas especially after the arbitration award by the London Court of Arbitration. "If the Tatas want they can pay immediately as there are many legal ways to pay us our exit price but this delay in repayment is hurting both of us," said a source in Docomo . The next hearing in the London commercial court is in February and legal circles expect a breakthrough by then. CROSS CONNECTION

• 2009: DoCoMo buys 26% stake in Tata Tele for Rs 109 a share ($2.5 bn)
• Jul 2014: DoCoMo asks Tatas to buy back its stake at pre agreed price of Rs 58 a share
• Dec 2014: RBI rejects Tata application to buy back Docomo shares; says laws bar pre-valued shares
• Jan 2015: DoCoMo begins arbitration in London against the Tatas
• Jun 2016: London Arbitration court awards $1.17 bn to DoCoMo

Jul 2016

• DoCoMo moved London Commercial court to enforce award, threatens to attach Tata assets
• DoCoMo moves Delhi HC to enforce award
• Tatas transfer $1.17 bn to Delhi HC registrar
• Sep 2016: Tata, DoCoMo blame each other for failed settlement talks