NEH DELHI: Tata Sons has agreed to pay USD 1.17 billion in damages to Japan’s NTT DoCoMo in their long-standing dispute over the latter’s exit from a joint venture in India.
Tata Sons and DoCoMo were not immediately available for comments.
Tata Teleservices and DoCoMo have been locked in a long tussle over the Japanese company’s move to exit a partnership formed in 2009.
Under the terms of that deal, in the event of an exit, DoCoMo was guaranteed the higher of either half its original investment, or its fair value.
When DoCoMo decided to get out in 2014, Tata was unable to find a buyer for the Japanese firm’s stake and offered to buy the stake itself for half of DoCoMo’s $2.2 billion investment.
India’s central bank blocked Tata’s offer, saying a rule change the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
Docomo proceeded to initiate arbitration in a London court, and won it. Tata was asked to pay a penalty of $1.17 billion, which it has deposited with the Delhi High Court.