In an attempt to block payment worth $1.17 billion arbitration award made by Tata Sons Ltd to NTT Docomo Inc, the Finance Ministry denied an exemption to the Indian foreign exchange act. After about 10 other companies requested similar waivers, the Indian government is cautious of setting an example by allowing Tata sons to pay the money to the Japanese company.
With the London Court of International Arbitration’s order to pay $1.17 billion, NTT Docomo is seeking the compensation from Tata Teleservices Ltd.
The NTT Docomo and Tata Sons agreement gives the former the right to request a buyer for its stake in the company at half of its aquisition cost or at a fair market price, whichever is higher. Tata Sons would face penalty if the payment is made without the approval from the Finance Ministry. NTT Docomo had filed a petition seeking the implementation of the arbitration payment rule.
With the blocked transfer, NTT Docomo plans to recover the due amount from all Tata Sons’ businesses.Yousuke Oowada, a spokesman for NTT Docomo told Bloomberg Quint that the company will take various steps to pursue the arbitration payment.
(With inputs from Bloomberg)