Tata Sons to pay NTT DoCoMo $1.17bn in damages
27 June 2016 |
Tata Sons has been ordered to pay $1.17 billion to NTT DoCoMo for breaching a shareholder agreement.
Tata Sons failed to fulfil its obligation to find a buyer or buy back the Japanese partner’s 26.5% stake in joint venture Tata Teleservices and as a result, will receive or designate a recipient for Docomo’s stake in Teleservices. The decision was ordered by the London Court of International Arbitration.
In 2009, DoCoMo bought a minority stake in the telecoms venture of Tata Group for $2.6 billion. Following losses, the company announced last July that it had exercised its option to request that a suitable buyer be found to acquire its 26.5% stake in Tata Teleservices for 50% of the acquired price, or a fair market price, whichever was higher. In January 2015, DoCoMo filed the arbitration request saying the Indian company had failed to find a buyer for DoCoMo’s stake.
"The award orders that Tata Sons pay damages to DoCoMo in the amount of approximately $1,172 million for Tata Sons' breach of the shareholders agreement, upon DoCoMo's tender of its entire stake in TTSL to Tata Sons or its designee," DoCoMo said on Friday. It added that some matters remain uncertain such as whether Tata Sons will pay the awarded damages and hen the delivery of TTSL’s shares will be made.
A Tata Sons spokesperson said: “We will not be able to comment further at this stage, beyond maintaining our consistent position that Tata Sons has always been and continues to be committed to discharge its contractual obligations in a manner consistent with the law.”