TOKYO (Reuters) - India's Tata Sons Ltd has been ordered to pay NTT DoCoMo Inc $1.2 billion to buy DoCoMo's stake in its mobile phone joint venture, the Japanese firm said, citing an international arbitration court ruling.
In 2009, the Japanese telecoms group acquired a 26.5 percent stake in Tata Teleservices Limited for around 127.4 billion rupees ($1.88 billion). In April 2014, it announced plans to exit the venture, which struggled to grow subscribers as quickly as its peers.
DoCoMo said it held the right to request that Tata find a buyer for its stake at 50 percent of the original price or at fair market value, whichever was higher. (http://reut.rs/28Qdp6m)
But Tata failed to find a buyer, and India's central bank rejected Tata's offer to buy the stake, saying a rule change in the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
The Japanese company said in a statement the award was for Tata Sons' breach of their shareholders' agreement.
In an emailed statement, a Tata Sons chairman said the company has received the arbitration decision and is reviewing it.
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"Tata Sons has always been and continues to be committed to discharge its contractual obligations in a manner consistent with the law," a spokesperson for the group said in the statement.
The decision comes at a time when Indian Prime Minister Narendra Modi has promised to pursue predictable policies amid concerns that foreign investments are not adequately protected in Asia's third-largest economy.
($1 = 67.9075 Indian rupees)
(Reporting by Chris Gallagher and Tony Munroe; Additional reporting by Himank Sharma; Editing by Edwina Gibbs)