The spat between the Tata group and NTT Docomo escalated on Friday with the Japanese telecoms firm accusing its partner of making excuses to not honour the Rs7,956 crore ($1.17-billion) arbitral award.
In a statement, it reiterated that the award is enforceable against the Indian group's overseas assets. This was strongly denied by Tata Sons, the group holding company, which said that Docomo's statement showed its ignorance of India's foreign exchange rules.
Reacting to a late Thursday night statement by Tata Sons, the Japanese company on Friday said Indian laws only regulate payment of "hard currency" by Indian entities. "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," Docomo said.
The Tatas on Thursday said that the group's UK companies weren't a party to the dispute with Docomo, and hence their assets could not be seized.
Responding to the Docomo statement, Tatas said they had every intention of paying (See: DoCoMo dispute: Tata Sons to deposit $1.2-bn arbitration award with Delhi HC). "With reference to the recent London Court of International Arbitration's arbitral award, Tata Sons confirms that the full amount, $1.17 billion, has today (Friday) been transferred into fixed deposits favouring the Court Registrar, New Delhi without prejudice to its legal rights. The Honourable High Court in Delhi has given time till 30 August 2016, for both parties to try and resolve the outstanding issues between them. In the meantime, we would caution against any stakeholders being misled by statements that are made in ignorance of India's foreign exchange regulations," the Tata statement said.
The Docomo statement essentially accused the Tatas of acting in bad faith. "The only excuse for non-payment of the award which is alleged by Tata is the decision by the Reserve Bank of India earlier this week which was based on a mischaracterised application unilaterally made by Tata without first consulting its partner Docomo," the Asian telecom major said.
"Docomo does not think that Tata Sons has in truth shown its willingness to make the payment," the company said. Tata Sons denied this version of events, claiming that it had invited the Japanese company to joint it in representing the matter before regulators.
"Tata Sons wishes to clarify that it has in the past, as well as after the arbitral tribunal announced its award, invited Docomo to join it in representing this matter before the Reserve Bank of India (RBI) and the Ministry of Finance."
Tata Sons was served an order from London's Commercial Court Order that appeared to suggest that Tata's UK assets, including Jaguar Land Rover, a unit of Tata Motors, or Tata Steel's Corus unit, maybe attached by NTT Docomo for recovery of the $1.17 billion it won in the arbitral award recently.
The Tatas on Thursday said it was an ex parte order (as they hadn't been heard) , and it had around three weeks starting 27 July to block Docomo from attempting seizure of the group's assets in the UK. It added that Tata Sons' minority stakes in the companies that own UK assets -Tata Motors and Tata Steel - shield the asset to the extent that recovery cannot be sought from companies other than Tata Sons.
NTT Docomo and Tatas have been feuding since the former was denied exit from loss-making telco Tata Teleservices at a pre-agreed price of half the original $2.7 billion investment, which came to Rs7,250 crore, due to local laws.
The Tatas had cited Reserve Bank of India rules for not paying the amount initially, and again cited the central bank's denial of permission to pay after a London arbitration panel moved by Docomo to resolve the dispute ruled in favour of the Japanese company.
The sparring partners are also in the Delhi High Court where Tatas have agreed to put the arbitral award money in an escrow account after NTT Docomo filed to enforce the arbitration award.
The Tatas said it was depositing the money in a "gesture of good faith", and reiterated its commitment to honour its contractual obligations, subject to Indian regulations and law.