Mumbai: Delhi High Court on Friday turned down the Reserve Bank of India's intervention petition opposing an agreement India's Tata Sons and Japanese telecom major NTT DoCoMo reached over payment of $1.7 billion arbitral award.
A report in Business Standard says there are a number of similar cases where foreign investors are considering to withdraw their funds from the country as they have won arbitral awards in their favour from an arbitration court outside India.
The report adds that Foreign Exchange Management Act forced these investors to hang on and barred them from pulling out their money from country. FEMA does not allow a stake or share buyback at predetermined valuations.
DoCoMo too had taken up the matter with London Court of International Arbitration and subsequently won the $1.7 billion arbitral award. Earlier, the Japanese company had failed to reach an agreement with Tata Sons through mutual talks.
RBI had objected to both Tata and DoCoMo clinching a consent deal and told the court that the pact violated provisions of Foreign Exchange Management Act as a foreign investor can't sell his stake to bigger partner after it withdrew from joint venture.
Under the agreement, Tata Sons has agreed to buy back 26.5 per cent stake from NTT DoCoMo and in return will trigger the process of transfer of money to Japanese firm. Tata Sons was looking for a buyer for the stake but failed....