Tata settles $1b dispute with NTT

mumbai — Indian salt-to-steel conglomerate Tata said on Tuesday it had reached agreement with NTT Docomo to pay the Japanese mobile carrier $1.18 billion to settle a long-running legal dispute.

Docomo paid $2.6 billion for a 26.5 per cent stake in Tata Teleservices in 2008 but triggered an option to sell it six years later after incurring losses and deciding to withdraw from India.

Under the terms of the tie-up, if Docomo pulled out Tata agreed to find a buyer for the Japanese firm’s stake, or buy back the investment itself at half the price.

When Tata failed to find a buyer and India’s central bank rejected Tata’s offer to purchase the stake as “illegal”, the Japanese giant approached an international arbitration court.

The court in June last year ordered Tata to pay $1.17 billion in damages. Tata Sons’ failure to pay up was believed to be a factor in shareholders’ decision to remove Cyrus Mistry as chairman last October.

In a statement on Tuesday Tata said it had reached agreement in principle to pay Docomo $1.18 billion, without giving details about why they had come to an agreement now.

“Tata Sons is pleased to announce that in the interests of putting an end to a dispute that had arisen with NTT Docomo, Japan, and in the larger national interest of preserving a fair investment environment in India,” read the statement.—