<article>The Delhi high court on Friday cleared the way for enforcement of the $1.17 billion arbitral award between <a style="color: #000080;" href="http://dealstreetasia.com/tag/tata-sons" target="_blank" rel="noopener noreferrer">Tata Sons</a> and <a style="color: #000080;" href="http://dealstreetasia.com/tag/ntt-docomo" target="_blank" rel="noopener noreferrer">NTT Docomo</a>.</article>

The Delhi high court on Friday cleared the way for enforcement of the $1.17 billion arbitral award between <a style="color: #000080;" href="http://dealstreetasia.com/tag/tata-sons" target="_blank" rel="noopener noreferrer">Tata Sons</a> and <a style="color: #000080;" href="http://dealstreetasia.com/tag/ntt-docomo" target="_blank" rel="noopener noreferrer">NTT Docomo</a>.
Accordingly, Tata Sons can proceed with the transfer of the amount to Docomo, and subsequently Docomo can transfer its shares in Tata Teleservices Ltd to Tata Sons.
The amount of $1.17 billion has already been deposited by Tata Sons with the court.
Justice S. Muralidhar rejected Reserve Bank of India’s (RBI) intervention in the enforcement of the award that had been agreed to by both parties.
The verdict has effectively diluted RBI’s standing, thereby limiting its role in a situation concerning enforcement of an arbitral award where money is sought to be remitted outside India.
Tata Sons had all along maintained that while it was willing to pay NTT Docomo what it owned the company according to their agreement, Indian laws prevented it from doing so.
Accordingly, both companies had reached a settlement concerning enforcement of the arbitration award in February itself and sought the court’s permission for transfer of funds under it. Subsequently, the RBI opposed the consent terms.
Not satisfied with the reasons for its objections, given that neither Tata Sons nor Docomo had objected to the arbitral award, the court had given RBI time to bring on record any rules or circulars which could impede the transaction.
RBI opposed the transfer of funds under mutual settlement between the companies and contended that permitting transfer of funds violated provisions of the Foreign Exchange Management Act (FEMA), 1999, and was against public policy.
RBI’s intervention was opposed by both Tata and DoCoMo through their respective counsels.
In April 2014, NTT DoCoMo had decided to sell its entire 26.5% stake in Tata Teleservices and withdraw from mobile telephony in India. Under the original agreement between Tata and NTT Docomo, the latter had the right to request a buyer for its stake at a fair market price or 50% of its acquired price, amounting to Rs7,250 crore, whichever was higher.
In January 2015, NTT initiated arbitration proceedings against Tata Sons, claiming the latter failed to fulfil its obligation to find a buyer for Docomo’s stake in Tata Teleservices Ltd.
A London tribunal in 2016 ordered the promoter of major Tata operating companies to pay $1.17 billion as compensation to NTT DoCoMo in June for breaching the agreement. Thereafter, DoCoMo filed an enforcement proceeding before the Delhi high court.
Former chairman Cyrus Mistry’s handling of this dispute was reportedly one of the reasons for Tata’s growing displeasure with him—which eventually resulted in his ouster as chairman of Tata Sons on 24 October.
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<h4>This article was first published on <a href="http://www.livemint.com/Industry/hrI5ikaP3uMbaeQ2gl0vNJ/Tata-SonsNTT-Docomo-case-Delhi-HC-clears-117-bn-arbitral.html" target="_blank" rel="noopener noreferrer">Livemint.com</a></h4>

The Delhi high court on Friday cleared the way for enforcement of the $1.17 billion arbitral award between Tata Sons and NTT Docomo.

Tata Sons-NTT Docomo case: Delhi HC clears $1.17 b arbitral award

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Tata Sons-NTT Docomo case: Delhi HC clears $1.17 b arbitral award

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