In a dispute over unpaid dues, Japans mobile phone operator NTT DoCoMo has filed a court order on Tata Sons. While the order includes a $1.17 billion (INR 7,838 crores) arbitration award, the London Court has however allowed Tata Sons to appeal against this order.
Tata Sons has been awarded 23 days starting from July 27, 2016 to file its application with the London Commercial Court. NTT DoCoMo has threatened to capture stake in Tata Steel and Jaguar Land Rover, which the Indian company has clearly stated will never happen.
But, the fact that the Japanese firm has served an order against Tata Sons, could affect the company’s efforts to sell their Tata Steel business in UK and other parts of Europe.
The tussle between the two dates back to 2014 when DoCoMo decided to exit Tata Teleservices following discrepancies in performance. DoCoMo had given Tatas 9 days to find a buyer but since Tata failed to find such a buyer for DoCoMo stake in the JV, the former exercised its right to seek buy back option. Tata Group did not repay to amount as Reserve Bank of India felt that this would be a violation of Foreign Exchange Management Act (FEMA) norms.
Even as the case progresses, it is estimated that DoCoMo will not be able to seize assets of Tata Steel and Tata Motors as these are listed companies owned largely by outside investors.
Tata Sons stated – “We would like to clarify that the London commercial court has granted Tata Sons a period of 23 days, starting July 27, 2016, to apply to set aside the exparte order. The arbitral award cannot be enforced until the end of that period, or until any application made by Tata Sons has been finally decided upon. Further, the British assets of Tata Steel and Jaguar Land Rover are not owned by Tata Sons. These are subsidiaries of Indian public listed companies of which Tata Sons is a promoter with a minority shareholding of not more than 30-35 per cent.”
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via Financial Times