Docomo files response on award enforcement dispute

 MUMBAI: NTT Docomo on Wednesday filed its response to the Tata Group’s position in the Delhi High Court that it cannot pay an international arbitration award in favour of the Japanese company, saying it was tired by what it called the bad faith shown by the Tata Group.
The filing comes ahead of the October 5 hearing where the court may decide whether or not to honour the $1.2 billion award. The two groups have been at loggerheads over their joint venture, Tata Teleservices.

The London Court of Arbitration agreed with Docomo’s argument that the Indian partner failed to meet the terms of their joint venture agreement to repurchase its 26% stake in Tata Tele or find another buyer. Docomo moved the Delhi High Court seeking enforcement of the arbitration award, but, in its filing to the court on September 2, the Tata Group said the award was unacceptable because the contract itself had become void after regulatory changes in India.

The Tata Group’s move had ended hopes that an out of court agreement was possible, as the two sides were in talks for a couple of days before the filing.

“The response deals comprehensively with the objections which Tata raised to enforcement in India of the award granted in Docomo's favour by the London Court of Arbitration,” a statement issued by Docomo said on Wednesday.

The Japanese entity said it was tired by what it called the bad faith shown by the Tata Group by invoking central bank rules to avoid payment. Sources familiar with Docomo’s views said the Tata Group brought forth ultimatums as opposed to a collaborative approach to finding a solution.

The Tata Group’s stand is two-sided. The group has always maintained its desire to pay but its inability to do so due to Reserve Bank rules. “We reiterate our earlier position that enforcement of the award in the absence of RBI’s approval would be violative of FEMA (the Foreign Exchange Management Act) and therefore any action towards implementing the award — whether in India or overseas — would be unlawful and against public policy,” a group spokesperson said.

The group had deposited the award amount with the HC registrar after the court had asked it to do so. “Parties have presented their respective position before the Delhi High Court and it is now for the Hon’ble Court to take a final view in this matter,” the Tata spokesperson said.

The Docomo statement said: “Docomo trusts that the Indian court will acknowledge its obligation to enforce the award, and with this confirmation Docomo hopes that Tata will work with it to enable payment of the amount due.”