Tata, DoComo agree to settle $1.17 billion dispute: Here's all the twists and turns in the case so far

After two long years of dispute, Tata Sons and NTT Docomo Inc. have finally seem to have reached a common ground to settle the issue. Tata Sons Ltd has agreed to pay Japan's NTT DoCoMo about $1.17 billion in connection with the termination of a joint venture in the country, according to reports. The two companies have made a joint application in the Delhi High Court to resolve the matter. The case will be heard on 8 March.

Following is the history related to the long tussle between Tata Teleservices and DoCoMo over the Japanese company's move to exit a partnership formed in 2009:

• In 2014, Japan's largest wireless carrier by subscribers, NTT DoCoMo Inc wanted to sell the entire 26.5 per cent stake in Tata Teleservices it had bought for 266.7 billion yen ($2.61 billion) in 2009 and 2011.

• Under the March 2009 agreement between DoCoMo, TTSL and Tata Sons Ltd - Tata Group's holding company, the Japanese firm "holds the right to require that its TTSL shares be acquired for 50 per cent of the acquisition price, which amounts to 72.5 billion Indian rupees (or 125.4 billion yennotice1) or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets."

• DoCoMo requested the sale in July,2014. That gave Tata Sons 90 business days to find a buyer for Rs 7,250 crore ($1.15 billion) or fair market price, whichever was higher. As a buyer was not found by December 3, DoCoMo filed an arbitration request on January 3 in 2015, with the London Court of International Arbitration to ensure the stake is sold.

• As Tata was unable to find a buyer for the Japanese firm's stake it offered to buy the stake itself for half of DoCoMo's $2.2 billion investment.

• However, the Reserve Bank of India blocked Tata's offer, saying a rule change the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.

• But NTT DoCoMo had been desperately looking to move out of the Indian market because of the hassles around the telecom business and growing competition. During the initial days of the JV, Tata-DoCoMo gained popularity with the 'one paise per second' offer. But it had failed to sustain the initial growth.

• Docomo proceeded to initiate arbitration in a London court, and won it. Tata was asked to pay a penalty of $1.17 billion.

• In September 2016, the Tata Group approached a London court seeking annulment of an exparte order obtained by NTT DoCoMo.

• Tata Sons' position was that it could not pay the sum claimed by DoCoMo pursuant to the award, since regulatory approval by the Reserve Bank of India (RBI), which was necessary for performance of the award, has been denied. In absence of such approval, enforcement of the award would be unlawful under applicable Indian law and contrary to public policy.

• Tata Sons was also disappointed with the lack of cooperation from DoCoMo in arriving at an amicable resolution by jointly engaging with the Indian Government and the Regulator on the issue.

• Alleging that DoCoMo has been confusing its intent to pay with what is legally payable by the Indian company, Tata Sons said its intent is to pay but within the confines of the law.

• In October 2016, the then Chairman of the group, Cyrus Mistry was ousted as Ratan Tata took over. It was said the Docomo dispute was one of the reason of Mistry's exit. However, Mistry stated that it was 'false and mischievous' to suggest that he acted on his own or without the knowledge of Ratan Tata on the Tata-Docomo matter.

• Mistry also asserted that "insinuations that Docomo issue was handled in a manner inconsistent with Tata culture and values are baseless".

• The latest development seems to suggest that the new Tata boss N Chandrashekaran is keen to resolve the matter.

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