Tata Sons moves court to set aside London court’s order favouring DoCoMo

Tata Sons Ltd said on Monday it has made an application to set aside an order obtained by NTT DoCoMo from a London court that would allow the Japanese company to claim Tata's overseas assets to settle a dispute over Tata Teleservices.

In June, London's Commercial Court ordered Tata to pay $1.17 billion to DoCoMo to settle the dispute.

Tata Sons said it has filed an application to set aside the ex-parte order obtained by NTT DoCoMo from London's Commercial Court on 25 July 2016 seeking to enforce the arbitration award by a London Court of International Arbitration (LCIA) dated 22 June 2016.

The award comes on a shareholders dispute between Tata Sons and DoCoMo in relation to DoCoMo's shareholding in Tata Teleservices Limited.

''Tata Sons' position is that it is not permitted to pay the sum claimed by DoCoMo pursuant to the award, since regulatory approval by the Reserve Bank of India (RBI), which is necessary for performance of the award, has been denied,'' the company stated.

Furthermore, Tata Sons said, enforcement of the award would be unlawful under applicable Indian law and contrary to public policy.

In July, DoCoMo obtained an order from the London court to enforce the arbitration award in Britain where the Tata Group runs two major businesses -- Tata Motors' luxury car unit Jaguar Land Rover, along with assets that are tied to Tata Steel (See: Tata Sons ordered to pay NTT DoCoMo $1.2 bn by international arbitration court). Tata has said it is willing to pay DoCoMo and has already deposited the money with the high court of Delhi, but India's central bank has refused to allow the payment as it would contravene domestic regulations.

On July 30, 2016, Tata Sons had deposited the entire $1.17 billion claimed by DoCoMo with the court registrar, High Court of Delhi, in connection with these proceedings before the High Court in Delhi, and had also filed its objections. (DoCoMo dispute: Tata Sons to deposit $1.2-bn arbitration award with Delhi HC). Tata Sons, the holding company, was given 23 days to respond to the order but in August sought a two week extension to that deadline.

"Tata Sons' position is that it is not permitted to pay the sum claimed by DoCoMo pursuant to the award, since regulatory approval by India's central bank, the Reserve Bank of India ... has been denied," the company said in a statement.

Tata said that without such approval, enforcement of the award would be unlawful under Indian law.

Tata Sons said it has always been committed to honour its contractual obligations within the framework of Indian law. But, the company has been disappointed with the lack of co-operation from DoCoMo in arriving at an amicable resolution by jointly engaging with the Indian government and the regulator on the issue.

''DoCoMo is unfortunately confusing Tata Sons' intent to pay with what is legally payable by the company; Tata Sons' intent is to pay but within the confines of the law,'' the company said.

Chronology of events
In March 2009, In 2009, DoCoMo bought a 26.5-per cent stake in Tata Teleservices Ltd (NTT DoCoMo to launch open offer for TTML on 19 February) In 2014, DoCoMo announced plans  to exit the venture, which had struggled to boost subscribers (NTT DoCoMo to exit Tata Tele joint venture).

DoCoMo then asked Tata to find a buyer for its stake exercising the put option in the contract that predetermined the value of 26.5 per cent equity to the higher of either half the investment DoCoMo made - which amounted to Rs7,250 crore - or the stake's fair market price.

Later in November, 2014, Tata Sons moved RBI for its approval to purchase DoCoMo's stake at Rs58.045 per share. In January, 2015, DoCoMo moved London Court of International Arbitration. Later on 20 February 2015, RBI turned down Tata Sons' application for approval to purchase DoCoMo's stake at Rs58.045 per share (RBI rejects Tata proposal to buy NTT DoCoMo stake). On 22 June 2016, London Court of International Arbitration ordered Tata Sons to pay $1.17 billion to NTT DoCoMo for breach of contract, and for NTT DoCoMo to tender to Tata Sons its shares of Tata Teleservices. On 1 July 2016, Tata Sons approached RBI to seek the approval for making payment to DoCoMo in terms of the arbitral award.

However, later on 7 July DoCoMo approached the Delhi High Court seeking enforcement of the Arbitral award. On 7 July 2016, DoCoMo also approaches the London Commercial Court, seeking enforcement of the award in the UK.

On 25 July RBI refused to approve Tata Sons' application for making payment to DoCoMo in terms of the arbitral award, while London Commercial Court passed an ex-parte order giving DoCoMo leave to enforce the award, subject to the right of Tata Sons to contest the order.

On 5 September Tata Sons submitted an application to the London Commercial Court seeking to have the ex-parte order set aside.