Tata Sons boardroom tussle: The 4 clauses in AoA that could decide who runs the conglomerate

What happens when the people who own a company disagree with the people who run it? At Tata Sons, that's not a hypothetical scenario anymore — it's the reality playing out right now. Tata Trusts owns 66% of Tata Sons but doesn't run daily operations; the board does. That divide has just erupted into open conflict, with Noel Tata calling the board's reappointment of Chairman N. Chandrasekaran "illegal."

The answer to who actually wins lies in four specific clauses in Tata Sons' Articles of Association — a document most people have never read but that could quietly decide the outcome of India's biggest corporate power struggle. From chairman appointments to special veto rights, these clauses hold more power than any single vote. Here's a breakdown of each clause, what it means, and why the next few weeks could reshape the future of the Tata empire.

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Tata Sons, Tata Trusts fight it out over Chandra's reappointment

Soon after Tata Sons approved N Chandrasekaran’s reappointment, Tata Trusts chairman Noel Tata opposed it, saying Chandrasekaran had told the board on August 12 that he would not seek another term after his current tenure ends on February 20, 2027.

"The decision was the Chairman's own," Noel said. Separately, Tata Trusts opposed the reappointment of N Chandrasekaran, stating the resolution passed by the board to revisit his appointment is legally invalid under the company's Articles of Association (AoA). Tata Trusts even called Chandrasekaran's reappointment "illegal" and a "legal nullity".

Days later, Tata Sons on Thursday rejected objections raised by Tata Trusts Chairman Noel Tata over the reappointment of N Chandrasekaran. In a September 24 letter to Noel Tata accessed by The Economic Times, Tata Sons said that the board approved the decision by a majority, adding the resolution was valid under the company's AoA.

Defending the validity of the September 17 resolution, the company maintained that the board followed the applicable legal and governance procedures while approving Chandra's reappointment, adding it relied on legal advice in arriving at its interpretation of the AoA.

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What is Tata's Articles of Association (AoA)?

The Articles of Association (AoA) refer to legal documents that set out the internal rules, governance framework, and day-to-day management procedures for a company. Tata Sons' AoA is unique as it contains provisions specific to the interests of Tata Trusts, which owns around 66% of the company.

In 2021, the Supreme Court examined these provisions in its judgment on the ouster of Cyrus Mistry as Tata Sons chairman in 2016 and upheld the Trusts' special rights.

Four clauses that could prove decisive

The four clauses that could prove who is the top voice in the Bombay House are Article 104B, Article 115, Article 118, and Article 121.

Article 118 vs Article 121: Which rule applies to Chandra's reappointment?

The tug-of-war between Tata Sons and Tata Trusts is over whether Article 118 and Article 121 apply to the third-term reappointment of N Chandrasekaran as the chairman of Tata Sons.

On the use of Article 118, Tata Trusts argues that giving Chandra a new five-year term is akin to a fresh appointment. The Noel Tata-led Tata Trusts believes Article 118 applies in such a situation. Tata Sons, on the other hand, said that Article 118 only applies while choosing a brand new chairman and not while giving extension to an existing, working chairman.

On the use of Article 121, Tata Trusts argues that it requires majority agreement from the directors chosen by Tata Trusts. While Noel Tata voted against Chandra's reappointment, Venu Srinivasan backed it. Tata trusts claims that the required trust support failed, adding the chairman can't use a casting vote to override this trust rule.

Tata Sons, on the other hand, claimed that the overall board vote and the use of the chairman's casting vote to break a tie were completely legal under Article 121.

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The 2022 precedent: Did Tata Sons use the same route last time?

Tata Trusts chairman Noel Tata said that Tata Sons used Article 118 when Chandrasekaran was reappointed in 2022. He reportedly attached the minutes of the February 11, 2022 meeting to substantiate his position.

Chandrasekaran's reappointment was unanimously approved by the Tata Sons board after the late industrialist Ratan Tata expressed satisfaction with the group's performance. Tata Sons' company secretary disputed this during the September meeting, stating that the 2022 reappointment was done under Article 121.