DoCoMo said Tata Sons should not use a recent decision by the Reserve Bank of India against the payment of hard currency from India to DoCoMo as justification for delaying the implementation of the arbitration award.
The following is the full statement from DoCoMo, as forwarded by Manash Neog, director of policy consulting firm Chase India.
“DOCOMO notes Tata and Sons commitment to honouring its contractual obligations and settle the London Court of International Arbitration arbitration award as determined unanimously by the distinguished panel of arbitrators appointed jointly by Tata and DOCOMO. DOCOMO also wishes that outcome.
The only excuse for non-payment.. is the decision by the Reserve Bank of India earlier this week which was based on a misrepresented application unilaterally made by Tata without first consulting its partner DOCOMO. By definition that decision only relates to payment of hard currency out of India. It cannot be used to block payment from funds or assets outside India nor can it prevent enforcement against such assets of Tata outside India.”
The dispute between the two has cast a shadow over foreign investments in Indian companies.
In November 2008, NTT Docomo invested $2.2 billion in Tata Teleservices, at ₹117 a share for a 26.5% stake in the latter. DoCoMo, TTSL and Tata Sons had in March 2009 signed shareholder agreement for the business alliance.
According to the agreement, DoCoMo reserved the right to to sell its stake if Tata Docomo missed performance targets, with Tata getting right of first refusal and also shouldering the obligation to buy back the shares from DoCoMo in case no other buyer could be found.
Tata sought the approval of the RBI, in November 2014, to buy back the shares from NTT Docomo for $1.1 billion (at ₹58.045 per share), half the price paid by them in 2009. The RBI had approved the deal in January 2015, but went back on the decision in March 2015, citing foreign exchange regulations.