 "Disappointed with lack of cooperation from DoCoMo: Tata Sons")
Tata Sons issued a statement on Sunday, saying it was committed to honouring its contractual obligations to NTT DoCoMo in compliance with Indian laws, but that it was “disappointed” at the lack of cooperation from the latter in sorting out the dispute over their joint venture, Tata Teleservices. “Despite several attempts on our part, our partner has refused to come together with us to engage the government and the regulator on the issue,” Tata Sons stated.
In June, the London Court of Arbitration (LCIA) had ordered Tata Sons to pay DoCoMo $1.17 billion in compensation for breaching an agreement. The arbitral award is the fallout of a two-year scuffle between the two companies with regard to their joint venture in which DoCoMo has 26 per cent holding.
In 2014, after the venture failed to generate the desired returns, DoCoMo decided to exercise the exit option. But, this came at a time when the Tata Teleservices shares had plunged far below the earlier decided exit amount. Unable to find an external buyer, Tatas made an application to the Reserve Bank of India to acquire the DoCoMo stake, as previously agreed upon. However, RBI refused the application saying 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 arbitration proceedings, resulting in the $1.17 billion award. Tata Sons has filed an affidavit in the Delhi High Court, objecting to the enforcement of the LCIA award.
Reacting to this, Docomo said Tatas’ objection to the LCIA award contradicted the former’s statements of intent to meet the payment obligations. However, Tatas said Docomo was “confusing” the Indian company’s intent to pay with what is “legally payable”. “There is a judicial process that is underway and we need to pay due heed to the laws that bind us all. Docomo is unfortunately confusing our intent to pay with what is legally payable by us. Our intent is to pay but within the confines of the law.”
In June, the London Court of Arbitration (LCIA) had ordered Tata Sons to pay DoCoMo $1.17 billion in compensation for breaching an agreement. The arbitral award is the fallout of a two-year scuffle between the two companies with regard to their joint venture in which DoCoMo has 26 per cent holding.
In 2014, after the venture failed to generate the desired returns, DoCoMo decided to exercise the exit option. But, this came at a time when the Tata Teleservices shares had plunged far below the earlier decided exit amount. Unable to find an external buyer, Tatas made an application to the Reserve Bank of India to acquire the DoCoMo stake, as previously agreed upon. However, RBI refused the application saying 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 arbitration proceedings, resulting in the $1.17 billion award. Tata Sons has filed an affidavit in the Delhi High Court, objecting to the enforcement of the LCIA award.
Reacting to this, Docomo said Tatas’ objection to the LCIA award contradicted the former’s statements of intent to meet the payment obligations. However, Tatas said Docomo was “confusing” the Indian company’s intent to pay with what is “legally payable”. “There is a judicial process that is underway and we need to pay due heed to the laws that bind us all. Docomo is unfortunately confusing our intent to pay with what is legally payable by us. Our intent is to pay but within the confines of the law.”