The RBI today told the Delhi High Court that it wants to take a fresh look into the USD 1.17 billion arbitral award granted in favour of Japanese telecom major NTT Docomo for Tata Sons’ alleged breach of its agreement. Justice S Muralidhar, however, did not agree with the stand taken by the Reserve Bank of India (RBI), saying “there is no point in going over it all over again”.
“RBI has already undertaken the exercise (of looking into the award) twice over. It might be better to tell the court, whether there is any statutory provision or regulation barring transfer of money overseas under the award,” the judge said.
The court also said that “in every private award, RBI cannot step in” and gave the bank time till tomorrow to show the rule, regulation or circular which comes in the way of implementation of the award.
Senior advocate Soli Sorabjee, appearing for the RBI, told the court that the bank would not press its application to intervene in the matter if it can take a fresh look into the award granted in favour of Docomo. This contention was opposed by senior advocates Kapil Sibal and Darius Khambata, appearing for Docomo and Tata Sons respectively.
They said that on March 8, the court had asked RBI to make its stand clear by showing the rule, regulation or circular under which the bank’s permission is required before transfer of money overseas under the award.
The lawyers for the two companies said that the RBI cannot keep it open ended by looking into afresh.
The court also agreed with the companies contention, saying the RBI cannot go round and round on the same issue.
The RBI has opposed the consent terms arrived at between Tata Sons and Docomo with regard to the enforceability of the award granted in favour of the Japanese telecom major by the London Court of International Arbitration (LCIA) in June 2016.
The RBI has also contended that that the shareholding agreement between the two companies permitting transfer of funds abroad was illegal as it violated the Foreign Exchange Management Act (FEMA) Regulations.