Japan legal claim threatens Tata assets in UK: Report
A dispute over alleged unpaid dues between Japan's mobile phone operator, NTT DoCoMo, and the Tata group could involve the latter's assets in Britain, according to a UK media report Thursday.
London: A dispute over alleged unpaid dues between Japan's mobile phone operator, NTT DoCoMo, and the Tata group could involve the latter's assets in Britain, according to a UK media report Thursday.
The Japanese firm has served an order from London's Commercial Court against Tata Sons which allows DoCoMo to enforce an arbitration deal, made in London in June, against Tata Sons' assets in the UK, 'The Financial Times' reported.
Tata Sons issued a statement today stressing that DoCoMo has obtained an "exparte" or one-sided order from the Commercial Court in London.
The statement said: "Because the order was obtained exparte Tata's arguments have not yet been heard. We would like to clarify that the London Commercial court has granted Tata Sons a period of 23 days, starting July 27th, 2016, to apply to set aside the exparte order.
"The arbitral award cannot be enforced until the end of that period, or until any application made by Tata Sons has been finally decided upon."
Tata Sons, the Indian conglomerate's holding company, owns a 29 percent stake in Tata Steel, which includes embattled UK steel units, and a 23 percent in Tata Motors, which includes the Jaguar Land Rover (JLR) brands in the UK.
The Tata statement today also said the UK assets of Tata Steel and Jaguar Land Rover are not owned by Tata Sons.
"These are subsidiaries of Indian public listed companies of which Tata Sons is a promoter with a minority shareholding of not more than 30 percent to 35 percent. These companies are not party to the arbitration proceedings, and no award has been issued against them. It follows that the award cannot be enforced against those companies," the statement said.
The latest development follows DoCoMo's?rejection of Tata Sons' offer to deposit USD 1.17 billion ? a penalty awarded by an arbitration panel ? with the Delhi High Court registrar.
The dispute relates to DoCoMo's exercise of its right to exit from Tata Teleservices ? its joint venture with the Tata Group.
DoCoMo had decided to exit Tata Teleservices in 2014 as its JV's performance was not up to the mark and had given Tata 90 days to find a buyer.
With Tata failing to find a buyer for DoCoMo's stake in the JV, DoCoMo had exercised its right to seek a buyback option.
The Tata Group, however, could not repay the amount as the Reserve Bank India (RBI) felt it would violate the Foreign Exchange Management Act (Fema) norms.
The Japanese firm initiated arbitration proceedings, which ruled in favour of DoCoMo and fined the Tata Group USD 1.17 billion.
Tata Sons had said in a statement earlier this week that it has "underlined" its commitment to honour its contractual obligations to DoCoMo, and has taken "every possible step keeping in mind the interests of all stakeholders and in accordance with Indian law".
DoCoMo declined to comment on the Financial Times report.