Tata Sons has agreed to pay $1.18 billion or Rs 7,876 crore to Japanese mobile operator NTT Docomo for transfer of the latter’s shares to Tata Teleservices.
Tata Teleservices, according to media reports, is looking for a merger with MTS-Aircel-Reliance Communications combine.
“The Board has agreed to pay $1.18 billion to Docomo as enforced by the London Court of International Arbitration on June 22, 2016 and withdraw objections to its award in India,” said Tata Sons, the Tata Group’s holding firm, in a statement.
As both the parties have jointly applied to the Delhi High Court for settling their dispute, the settlement terms will be subject to its further orders.
Tata Sons has already deposited the amount with the Delhi High Court.
As part of the joint application, Docomo has agreed to suspend its enforcement proceedings in Britain and the US for a period of time.
Background
Earlier, Tata Sons has been asked by an international arbitration panel to pay $1.17 billion to the Japanese telecom major NTT Docomo towards alleged breach of agreement by a group company.
NTT Docomo, a part of Japan’s Nippon Telegraph and Telephone Corp, had filed a plea last year at the London Court of International Arbitration against the Tatas, seeking damages for Tata Sons’ failure to find a buyer for Docomo’s stake in Tata Teleservices.
Docomo had decided to opt out of Tata Teleservices by selling its entire stake of a little over 26 percent. The stake had been acquired for $2.7 billion. Docomo said it had asked the Tatas to find a buyer at half that price, or $1.17 billion, or a higher fair-market value.
Docomo said that it was forced to go for arbitration following the failure of repeated negotiations with Tata Sons regarding the sale of its entire stake.
