DoCoMo wins Indian court case over TTSL exit

02 May 2017
Daily News

India's Delhi High Court has found in favor of Japan's NTT DoCoMo and local holding company Tata Sons in their dispute with the Reserve Bank of India (RBI) over an international arbitration settlement.

With the verdict DoCoMo will be entitled to collect the $1.18 billion award reached in a settlement agreement in the London Court of International Arbitration, associated with DoCoMo's planned exit of the Tata DoCoMo Indian telecoms joint venture.

When DoCoMo first entered the joint venture in 2008 via an investment in Tata Teleservices, it was with the condition that the operator would be entitled to sell its stake in the venture at a predetermined sum if it chose to leave the venture.

DoCoMo attempted to exercise this option in 2014 after the joint venture failed to perform as desired, and when Tata Sons failed to find a buyer the holding company applied to the RBI to make the acquisition.

But the RBI blocked the transaction on the grounds that it violates Indian regulations restricting the sale of shares at a price higher than market value.

DoCoMo entered international arbitration with Tata Sons and Tata Teleservices in an attempt to break this deadlock, and the court awarded DoCoMo with $1.17 billion in damages.

But the RBI objected to this transaction, and DoCoMo accordingly brought the case before the Delhi High Court. DoCoMo and Tata entered a settlement agreement in February, but the RBI once again sought to block the enforcement of this agreement on the grounds that it would be circumventing Indian regulations.

Tata Sons was required to deposit the $1.18 billion with the court while the case was being held. The settlement can now be transferred to DoCoMo in exchange for the operator's shares in Tata Teleservices..

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