Tata Sons power struggle: Who will pay for the next legal battle?

In an unprecedented turn of events for India’s most storied conglomerate, a major internal rift has erupted over the financing of an escalating boardroom dispute between Tata Trusts and Tata Sons.

Mehli Mistry, a trustee of the Tata Education and Development Trust (TEDT), has formally registered his objection against utilising trust funds to cover legal expenses stemming from the high-stakes confrontation over N Chandrasekaran’s reappointment as Chairman of Tata Sons, according to a report by ANI.

In a direct email addressed to Siddhartha Sharma, the Chief Executive Officer of Tata Trusts, Mehli Mistry underscored that the educational entity must remain entirely separate from the ongoing legal battles. The communication was also copied to Tata Trusts Chairman Noel N Tata and fellow TEDT trustee JN Mistry.

"I am saddened to read about the litigation between Trustees, Tata Sons and Tata Trusts. This has been unprecedented over the past 150 years!" Mehli Mistry wrote in the email, ANI reported.

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Highlighting the financial independence of the philanthropic entity, Mistry made his stance clear regarding the potential diversion of resources.

"While I do not want to comment on the experience and attitude of people, I want to make it abundantly clear that TEDT will not pay any part of legal expenses towards these created disputes. TEDT is not a Tata Sons shareholder, and therefore, in that respect, stands isolated from these disputes," the trustee said, according to the news agency.

Mehli Mistry requested that his written objection be formally tabled and recorded during the next meeting of the TEDT Board of Trustees, scheduled for November 20, 2026.

While his email did not confirm whether funds had already been disbursed or explicitly requested, the objection stems from an intense apprehension that the trust could be called upon to shoulder the financial burden of the looming courtroom battles.

The conflict pits two of India's most prominent legal heavyweights against each other: Senior Advocate Abhishek Manu Singhvi is representing Tata Trusts, advocating for shareholder primacy and governance rights, while Senior Advocate Harish Salve is advising Tata Sons Chairman N Chandrasekaran, arguing against corporate deadlock and backing the board's decision.

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The concern over funding is further sharpened by historical precedent. During the long-running corporate battle involving former chairman Cyrus Mistry, Tata Sons and Tata Trusts together shelled out roughly ₹200 crore in legal fees, while the opposing Mistry camp spent around ₹50 crore, according to media reports.

Mehli Mistry — a long-time close associate of the late Ratan Tata and first cousin to the late Cyrus Mistry — previously served on both the Sir Ratan Tata Trust and Sir Dorabji Tata Trust. His tenure at those trusts faced strain last year when fellow trustees, including Noel Tata, declined to support renewing his term.

The friction originates from a contentious leadership decision at Tata Sons.

On August 12, N Chandrasekaran informed the Tata Sons board that he would not seek an extension when his term ends on February 20, 2027. Following this, the Sir Dorabji Tata Trust (SDTT) respected his choice and resolved to establish a Selection Committee under the company's Articles of Association (AoA) to identify a successor.

However, on September 17, the Tata Sons board voted 4:1 to extend Chandrasekaran's tenure for another five-year term, with Noel Tata casting the sole dissenting vote.

Tata Trusts — which collectively hold nearly 66 per cent of Tata Sons — has since termed the reappointment a "legal nullity" and "void ab initio." The Trusts assert that the decision failed to secure the mandatory affirmative support from its nominated directors on the Tata Sons board as required by the Articles of Association.