Opening yet another battle front against the Tatas, Japanese telecom major NTT Docomo has sued group holding firm, Tata Sons in an American court asking it to pay $1.17 billion in damages that it won in the London Court of Arbitration.
The suit has been filed in the US District Court’s Southern District in New York. The Japanese court had earlier warned that it would get courts across the world to attach Tata Sons properties to make sure that the Tatas pay it the exit price that was decided when it invested in Tata Teleservices in 2009.
The Tatas have said Docomo cannot attach Tata properties in UK as Tata Sons, the holding company of the group, is a minority shareholder in Tata Steel and Tata Motors-JLR. A Tata source said NTT Docomo’s hardline approach and continuous litigation in Indian and United Kingdom courts is blocking any settlement with the Tatas over the former’s exit from Tata Teleservices, the loss-making joint venture between the two companies.
The Tatas have argued that it wants to pay the amount to Docomo — provided the Indian government clears the foreign exchange outflow. The Tatas have also moved the Delhi High Court seeking its approval to close the deal. The Tatas said Docomo is jumping the gun in legal matters instead of settling the case in India. With this, the Tatas are fighting Docomo in New York, London Commercial Court and in Delhi high court.
A Tata Sons source said the group is losing Rs 2 crore a day and has already lost Rs 60 crore in interest for the amount ($1.17 billion) deposited with the Delhi High Court. “We asked for a standstill agreement in legal proceedings to settle the matter but Docomo did not do so,” a Tata group official had said earlier.
But a source in Docomo’s team recently 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 2016, Docomo moved the Commercial Court in United Kingdom in July to enforce the award. Docomo threatened to attach British properties owned by the Tatas and moved the Delhi High Court to enforce the arbitration award. “The Tatas have their brand name to protect globally and should not go back on agreements made earlier,” said a source in Docomo.
The tussle between the two relates to Docomo’s exit price from Tata Teleservices under which the Tatas were to buy out 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.