In a feud on the arbitration award, Japanese telecom firm NTT DoCoMo has moved a United States district court to force its estranged Indian partner Tata Group seeking $1.2 billion in damages that it had won in the London Court of Arbitration in June this year for exiting the loss-making joint venture — Tata Teleservices.
In response to this, Tata Sons said it had filed evidence with the English High Court supporting application to set aside ex parte order obtained by the Japanese telecom major.
It said it would resist enforcement of the arbitration award at all places, as it has been barred by Indian law and public policy.
Tata Sons claimed that “the performance of the award requires the approval of the Reserve Bank of India, which to date has been denied on the basis of pre-existing regulations that are fully in the knowledge of DoCoMo.”
It further said it has already placed the full amount awarded to DoCoMo in the arbitration — $1.17 billion, in cash with the High Court of Delhi, where DoCoMo had previously filed for enforcement of the arbitral award and the entire issue is pending adjudication.
NTT DoCoMo believes that the decision of London Court of International Arbitration (LCIA) dated June 22 that Tata has breached its commercial agreement, and owes DoCoMo $1.2 billion in damages is enforceable in any country, which is a signatory to the New York Convention, including the United States. “Until DoCoMo receives the full amount due, it will continue to seek enforcement globally,” the statement said.
In November 2009, DoCoMo had acquired 26.5% stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share). This was as per a 2008 understanding that in case it exits the venture within five years, it will be paid a minimum 50% of the acquisition price.
Tata Sons’ evidence outlines the grounds on which enforcement of the award will be resisted by Tata Sons. These include: first, that Docomo had not validly tendered its shares in Tata Teleservices Limited to Tata Sons, which is a necessary condition precedent to payment by Tata of the sum awarded by the arbitral tribunal; and secondly, that performance of the award without approval by the Reserve Bank of India would be illegal under Indian law and/or contrary to public policy, said the statement.