New Delhi: 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. Under the consent terms, Tata and Docomo have decided to settle their two-year old dispute regarding their telecom joint venture, Tata Teleservices Ltd (TTSL), with the Indian company withdrawing its objections to the enforcement of the award.
Tata has already deposited the amount of USD 1.17 billion with the Delhi High Court.
The Japanese company in turn has said it will "suspend its related enforcement proceedings in the United Kingdom and the United States" for a period of six months.
The RBI is opposed to the consent terms and had earlier said that if Docomo fails to succeed in enforcement of its award in India, it cannot say it will try and enforce it in some other jurisdiction after six months.
On the last date of hearing, the court had disagreed with RBI's contention and had termed it "absurd". It had said that if Docomo does not succeed here, it can take the award for enforcement of the award to the US or the UK and "RBI has no jurisdiction outside India".
Docomo had in November 2009 acquired 26.5 per cent stake in TTSL for about Rs 12,740 crore. After Docomo's exit from the joint venture, TTSL, the matter had gone to arbitration as Tata was unable to find a buyer for Docomo's 26.5 per cent stake in TTSL for 50 per cent of the acquisition price, which came to around Rs 58.45 per share.
The Japanese company was not willing to accept the "fair market value" of Rs 23.44 that the Indian company was willing to pay as per the shareholding agreement. Under the agreement between the two companies, on Docomo's exit from the venture within five years it will be paid a minimum 50 per cent of the acquisition price through the purchase of its shares by a buyer who would be found by Tata.
The other option was Tata purchasing the shares at fair market value. LCIA had awarded the damages in favour of Docomo for Tata's alleged breach of the agreement regarding buying of the Japanese company's stake on its exit.
Docomo had moved the Delhi High Court for enforcement of the award after Tata cited refusal of permission by RBI to make the payment. Docomo in an affidavit had said that RBI's permission was not required for paying the damages....