DoCoMo launches London arbitration over Tata JV stake sale

NTT DoCoMo Inc today said it has asked a London court to ensure Tata Sons Ltd finds a buyer for the Japanese telecom operator's stake in their now-ended joint venture for $1 billion, after Tata failed to do so by an agreed date.

DoCoMo paid ¥266.7 billion ($2.22 billion) for 26.5-per cent of Tata Teleservices Ltd in 2009 (See: Tata Communications sells Rs424-crore worth stake in Tata Tele to NTT Docomo).

Under the agreement, holding company Tata Sons would sell the stake for at least half of the purchase price if certain performance targets were not met, DoCoMo said in a statement.

DoCoMo requested the sale in July. That gave Tata Sons 90 business days to find a buyer for Rs7,250 crore ($1.15 billion) or fair market price, whichever was higher, DoCoMo spokesman Shunsuke Muraki said.

As a buyer was not found by 3 December, DoCoMo filed an arbitration request on 3 January with the London Court of International Arbitration to ensure the stake is sold, Muraki said.

"Worst case scenario, if the agreement is not followed through, a foreclosure is a possibility," Muraki told Reuters.

Tata Sons said in a statement on Monday it would continue with efforts to find a solution to the issue.

"From the outset, Tata Sons has been committed to honouring its obligations to DoCoMo, and has taken every possible step keeping in mind the interests of all stakeholders and in accordance with law," the company said.

"Tata Sons has made the necessary application to the Reserve Bank of India, and is awaiting a response," it said, without elaborating.