Tata said that before going to arbitration, it had sought

Tata said that before going to arbitration, it had sought

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Tata said that before going to arbitration, it had sought
RBI’s permission for paying an amount equal to 50 per cent of acquisition price and while the central bank had initially agreed, the Ministry of Finance had asked RBI to stick to its extant regulations and not give any special permission.
Thereafter, on award of damages, which was the same amount as was to be paid if the shares were bought at 50 per cent of acquisition price, it had again approached RBI for permission and the central bank had refused, the Indian company said.
Docomo, however, questioned the need for Tata going to RBI for permission before arbitration and contended that it was done so as to tell LCIA that it cannot go ahead with tranfer of funds abroad. Tata disputed the contention.
In November 2009, Docomo had acquired 26.5 per cent stake in TTSL for about Rs 12,740 crore. The two had also agreed that in case Docomo exits the venture within five years, it will be paid a minimum 50 per cent of the acquisition price through 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 damages of USD 1.17 billion in favour of Docomo for Tata’s alleged breach of the agreement regarding buying of the Japanese company’s stake on its exit.
Docomo moved the Delhi High Court for enforcement of the award after Tata cited refusal of permission by RBI to make the payment.
Docomo, in a recent affidavit, had said that RBI’s permission was not required for paying the damages. PTI HMP SC
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