Tata Sons and NTT Docomo have finally reached a common ground over their two year old dispute with the Indian conglomerate agreeing to pay Japanese telecom company about $1.17 billion in connection with the termination of a joint venture in India.
The two companies have reportedly moved a joint application to the Delhi High Court saying both the companies have agreed to settle their dispute, with the Tatas withdrawing their objection to a London-based arbitration court’s award of damages in favour of Docomo. The parties have opted for an out-of-court settlement.
The application also does not oppose Reserve Bank of India’s intervention and proposes to pay out the total amount without violating FERA laws.
The latest development comes as Tata Sons chief N. Chandrasekharan looks to quickly resolve the issue that cropped up during rein of Cyrus Mistry. His handling of Tata- Docomo dispute was one of the many greicvances of stake -holders.
If the settlement sees light of the day, then Tata teleservices would be able to merge with another telco, a trend triggered by emergence of Reliance Jio.
In 2009, Japanese telco invested around Rs 12,740 crore to buy 26.5% stake in Tata Telecom services. Under the terms both agreed that on failure to meet certain criteria, DoCoMo had the right to exit the venture after five years and would get back a minimum 50% of its investment. DoCoMo later deemed the venture as their worst overseas investment and sought USD 1.17 billion.