India Central Bank Said to Seek to Be Heard in Docomo-Tata Spatby , , and
Delhi High Court will next hear the case in two months
Docomo is seeking enforcement of $1.17 billion arbitral award
India’s central bank has sought to be heard on the battle underway in the Delhi High Court between Tata Sons Ltd. and its estranged partner NTT Docomo Inc., people with direct knowledge of the matter said.
NTT Docomo is seeking to enforce a London Court of International Arbitration order, asking Tata Sons to pay $1.17 billion for failing to uphold a contract. The Indian company says it cannot pay due to the nation’s foreign exchange rules, which are overseen by the central bank.
The court asked the Reserve Bank of India to make an application if it wants to be heard on the case, the people said, declining to be identified as the matter is sub-judice. RBI approval is not required to implement the London court’s order, according to a Docomo affidavit, the people said.
Docomo shares fell 0.2 percent to close at 2,511 yen in Tokyo, while the Topix stock index climbed 0.5 percent.
Docomo invested in Tata Teleservices Ltd. in 2009 and, under the terms of the deal, has the right to request a buyer for its stake in the company at a fair market price or 50 percent of its acquisition cost, whichever is higher. Indian authorities say Docomo can only sell its stake at a “fair value.” Accumulated losses at Tata Teleservices mean Docomo’s stake is valued at less than 50 percent of what it paid.
“Docomo must wait to see what position, if any, the RBI takes,” Docomo said in an e-mailed statement Thursday. “Docomo will continue to pursue its enforcement options against Tata in multiple jurisdictions and again calls upon Tata to cooperate.”
Tata has deposited $1.17 billion with the Delhi High Court to show its intent to pay the amount, subject to Indian rules. Tata Sons declined to comment on the move by the central bank saying that the matter was sub-judice. An RBI spokeswoman didn’t respond to an e-mail. The court will next hear the matter on Dec. 1.