NTT DOCOMO Seeks Arbitration, TATA Group Looks For An Amicable Solution
NTT DOCOMO Seeks Arbitration, TATA Group Looks For An Amicable Solution
NTT DOCOMO Inc. has announced a request for arbitration with TATA Sons Limited/TATA Sons on January 3, 2015, a holding company of TATA Group. This is pursuant to shareholders agreement regarding exercise of NTT DOCOMO’s option for sale stake in TATA Teleservices Limited, which is a telecommunications service provider in India.
Arbitration Set in Motion
The London Court of International Arbitration has been selected as the arbitration while the location is London, England. The date of filing is January 3rd, 2015. As per the terms of shareholder agreement between DOCOMO TTSL and TATA Sons, DOCOMO has exercised the option to request a suitable buyer for purchase of its TTSL shares at half the acquired price amounting to INR 72.5 billion or a fair market price, whichever is higher.
Pursuant to the shareholder agreement, a request has been submitted for arbitration to ensure the right is exercised after TATA Sons could not find a buyer.
Regarding NTT DOCOMO
NTT DOCOMO provides safe, innovative and convenient services for smarter living and serves over 64 million mobile customers in Japan alone. It provides services through advanced wireless networks including nationwide 3G network. NTT DOCOMO established one of the first commercial LTE networks across the globe. Cutting edge technologies have been developed by this company including mobile GPS, intuitive mobile assistance and mobile TV. The company also provides technical as well as operational exercise to partner companies including 8 mobile operators.
Stake Acquisition in TTSL
DOCOMO has in March 2009, acquired a 26.5% stake in TTSL for USD 2.22 billion. At the time of acquisition of the stake, it had been agreed that DOCOMO would be paid half of its investment in case the telecom company did not meet certain performance targets.
An amicable parting was in way in April when DOCOMO announced plans to exit the JV. On July 7th, 2014, DOCOMO has exercised the sale option and as per the conditions, TATA Sons looked for a buyer for DOCOMO’s stake in 90 working days for a minimum of INR 7,250 crore or USD 1.15 billion which ended on December 3rd, 2014.
TATA Sons Seeks Amicable Parting
“Yes, we have learnt that DOCOMO has filed for arbitration. From the outset, Tata Sons has been committed to honouring its obligations to DOCOMO, and has taken every possible step keeping in mind the interests of all stakeholders and in accordance with law,” a Tata Sons spokesperson said, according to media reports.
“Tata Sons has made the necessary application to the Reserve Bank of India, and is awaiting a response. TATA Sons will continue with its endeavour to find an amicable solution,” the spokesperson also added. TTSL is an integral part of TATA Sons for now. Efforts are on to find a mutually acceptable solution for all parties concerned.
