Docomo sues Tatas in US to recover $1.17-bn UK award
07 October 2016
Japanese telecom major NTT Docomo has sued Tata Group holding company Tata Sons in a US court, asking it to pay $1.17 billion in damages it won in a UK court over a case that is not maintainable in Indian courts.
The Japanese group filed a suit in the Southern District Court of New York in the US, escalating the legal war with the opening of yet another battle front against the Tatas, making a settlement difficult for the Tatas.
The Tata Group holds it is willing and ready to pay but cannot go against the law and the government in a case involving huge foreign exchange outflow. In fact, the Tatas have moved the Delhi High Court seeking its approval to close the deal.
A Japanese company had earlier warned that it would get courts across the world to attach Tata Sons properties to make sure that the Tatas pay it the exit price that was decided when it invested in Tata Teleservices in 2009.
However, the Tatas say the case cannot be enforced in the UK and that Docomo cannot attach Tata properties there as Tata Sons, the holding company of the group, is a minority shareholder in Tata Steel and Tata Motors-JLR.
Tata source say NTT Docomo's litigation spree is only helping top block the prospects of a settlement over the former's exit from Tata Teleservices, the loss-making joint venture between the two companies.
The Tatas have argued that it wants to pay the amount to Docomo - provided the Indian government clears the foreign exchange outflow. However, for that Docomo should first decide how and where it wants to settle the dispute.
The Tatas have also moved the Delhi High Court seeking its approval to close the deal and has now to fight Docomo in New York, London Commercial Court and in the Delhi high court.
Tata Sons, which has already deposited $1.17 billion in the Delhi high court, says it is loosing Rs2 crore every day in interest income and has so far lost Rs60 crore in interest on the interest-free deposit with the Delhi High Court.
"We asked for a standstill agreement in legal proceedings to settle the matter but Docomo did not do so," a Tata official had said earlier.
On the other hand, Docomo sources say the Tatas have asked them to first withdraw cases filed in the commercial court in United Kingdom before they can initiate any settlement talks.
Soon after winning the UK court award, Docomo had threatened to attach British properties owned by the Tatas and moved the Delhi High Court to enforce the arbitration award. "The Tatas have their brand name to protect globally and should not go back on agreements made earlier," said a source in Docomo.
Tata Sons said it maintains the same position with respect to the award. However, performance of the award requires the approval of the Reserve Bank of India, which to date has been denied on the basis of pre-existing regulations that are fully in the knowledge of Docomo.