Tata Sons has paid $1.27-bn arbitration award: Docomo

MUMBAI: Japan’s NTT Docomo Inc said on Tuesday that it had received from Tata Sons Ltd the 144.9 billion yen ($1.27 billion) it was awarded by an international arbitration court last year for its stake in Tata Teleservices Ltd (TTSL).

The payment marks the exit of the Japanese company from TTSL and brings the curtain down on a dispute that broke out after Docomo’s 2014 decision to exit from the venture in which it had purchased a stake in 2009.

“Concurrent with the receipt of the above amount, all shares in TTSL held by DOCOMO have been transferred to Tata Sons and companies designated by Tata Sons,” the Japanese company said in a filing with the Tokyo Stock Exchange.

Following the transfer of shares, Docomo no l onger accounts for its investment in TTSL under the equity method, it said. The Japanese telco expects to include a loss on transfer of investments in affiliates of 29.8 billion yen ($0.26 billion) under other expenses on its consolidated financial statement for the three-month period ending 31 December 2017, it said

A Tata Sons spokesperson declined to comment.

On May 26, the Competition Commission of India (CCI) approved Tata Sons’s purchase of a 21.63% stake in Tata Teleservi- ces from Docomo, taking the longpending settlement a step closer to completion. In an April 28 ruling, the Delhi High Court upheld the validity of the arbitration award and directed the parties to proceed with the consent terms flowing from it.

The Reserve Bank of India (RBI) had opposed the transfer of funds under a settlement between the companies and contended that transfer of funds violated provisions of the Foreign Exchange Management Act (Fema), 1999, and was against public policy.

On February 28, the two companies told the Delhi High Court that they had reached an agreement over enforcement of the arbitration award on the issue.