Japan’s NTT DoCoMo has secured a $1.17 billion award in its arbitration proceedings against Tata Teleservices (TTSL) over the Japanese operator’s planned exit from its Indian investment.
DoCoMo filed arbitration proceedings against TTSL - as well as TTSL parent company Tata Group’s majority shareholders Tata Sons Limited - in 2015, alleging violation of the shareholder agreement.
DoCoMo had elected in 2014 to divest its stake in TTSL due to poor financial performance.
The company sought to exercise its right to request that a buyer be found to purchase its entire stake in TTSL for at least 50% of the acquired price – which would be worth $1.17 billion.
But in January last year, DoCoMo submitted a request for international arbitration on the grounds that Tata Sons had failed to fulfil this obligation.
The London Court of International Arbitration has now ordered Tata Sons to pay damages to DoCoMo amounting to around $1.17 billion, in return for DoCoMo tendering its entire stake in TTSL to Tata Sons.
In a statement announcing the arbitration decision DoCoMo cautioned that some matters still remain uncertain, “including whether Tata Sons will pay the awarded damages and when the delivery of TTSL's shares will be made.”
The operator is accordingly unable to predict the impact of the order on its earnings for the financial year ended in March.