Tata Sons withdraws application against DoCoMo in Delhi HC

Following news that Tata Sons and NTT DoCoMo have opted for an out-of-court settlement, Tata Sons has withdrawn its application against DoCoMo in the Delhi High Court, reports CNBC-TV18.Tata Sons has agreed to pay USD 1.17 billion in damages to Japan's NTT DoCoMo  in their long-standing dispute over the latter's exit from a joint venture in India. DoCoMo has also agreed to not pursue the award for the next six months.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 percent stake in their telecom joint venture Tata Teleservices.The biggest hurdle to a settlement now remains the Reserve Bank of India, which is opposed to the payout under the existing structure. RBI said the existing clause in the joint venture agreement was illegal, something which Tata Sons denies. HP Ranina, a senior lawyer, said this settlement is against the RBI's norms and the parties may not be able to take this forward. They will have to look for other alternatives.Tata and DoCoMo will have their fingers crossed when the RBI reviews the case on March 8.In 2009, the Japanese telecom giant invested around USD 2.6 billion in order to buy a 26.5 percent stake in Tata Teleservices. Under the terms of that deal, in the event of an exit, DoCoMo was guaranteed the higher of either half its original investment, or its fair value. DoCoMo later deemed the venture as its “worst” overseas investment, and sought USD 1.17 billion in compensation for its 2014 exit from India.Watch video for more.