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Tata Sons, DoCoMo may announce truce in $1.17 bn dispute: Srcs

Tata Sons and Japanese telecom operator NTT Docomo may announce a truce on Tuesday in their long-standing dispute over the latter’s exit from a joint venture, reports CNBC-TV18’s Nisha Poddar quoting sources.

The sources said that while all the issues had not yet been resolved, the parties may opt for an out-of-court settlement. The matter is currently being heard by the Delhi High Court. 

It is understood that the new regime at Tata Sons under N Chandrasekaran has sought to quickly resolve the matter, which cropped up under the reign of Cyrus Mistry.

Mistry’s handling of the dispute was among the many grievances that irked the Tata Sons board and led to his unceremonious ouster last October.

In 2009, the Japanese telecom giant invested around USD 2.6 billion in order to buy a 26.5% stake in Tata Teleservices (TTSL). It later deemed the venture as its “worst” overseas investment, and sought USD 1.17 billion in compensation for its 2014 exit from India.

In June last year, an arbitration court in London ruled against the Tata Group. Docomo had alleged a breach of contract on the grounds that Tata Sons had neither found a buyer nor bought back the Japanese partner’s 26% stake in their telecom joint venture Tata Teleservices. 

The Reserve Bank of India was opposed to the payout under the existing structure. It said the exist clause in the joint venture agreement was illegal, something which Tata Sons denies.

Both Tata Sons and NTT Docomo refused to comment on the matter.