In the Tata Sons-NTT DoCoMo dispute, the Delhi High Court on Wednesday reserved its judgment on the RBI’s objection to the joint settlement filed by the two companies for enforcement of the $1.17-billion arbitration award by the London Court of International Arbitration (LCIA). Justice S Muralidhar also reserved the order with regard to permission sought by the companies for transfer of funds as per the settlement arrived at between the parties.
When asked by the HC as to why the banking regulator should be allowed to intervene in the case as this stage, RBI’s lawyer C Mukund told the court that a mutual settlement between the two firm permitting transfer of funds violated provisions of FEMA rules, and also, it was against public policy. “Can the court suo motu allow such an intervention, considering you are not a party in the matter? Is it your contention that for every arbitral award where money is remitted outside India, the RBI would have the right to intervene?” the judge asked.
Opposing RBI’s intervention, both senior advocates Kapil Sibal and Darius Khambata, appearing for Docomo and Tata Sons, respectively, argued that the RBI’s objection should be rejected as the regulator was challenging the pricing aspect and not the agreement between the companies. “Objection is to the pricing and not the agreement. Question of pricing arises when there is a transfer of shares. When there is no transfer of shares, RBI’s opposition should be rejected at the threshold… And any objection now or at a later stage is against the fundamental law of the country. It is a decree which should be enforced,” Sibal said. He further said that RBI can’t file such application raising objection as it was never a party to the arbitration. “There is no point in RBI objecting now and thereafter,” he added.
The court had on Tuesday asked RBI to submit any rule, regulation or circular by Wednesday to justify its objection to transfer of money under the award.