The Reserve Bank of India (RBI) on Tuesday told the Delhi High Court that it wants to have another look at the joint settlement filed by Tata Sons and its erstwhile Japanese telecom partner NTT DoCoMo for enforcement of the $1.17-billion arbitration award by the London Court of International Arbitration (LCIA). Justice S Muralidhar, however, refused to agree with the RBI stand on revisiting the issue, saying “there is no point in going over it all over again”.
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“RBI has already undertaken the exercise (of looking into the award) twice over. It might be better to tell the court whether there is any statutory provision or regulation barring transfer of money overseas under the award,” the judge said, adding that while both companies had agreed on a settlement, the only issue left to be decided is whether the RBI saw any impediment in the transfer of money.
“We are asking you (RBI) specifically, do you foresee any impediment to the transfer of money under the arbitral award?” the judge asked, observing that the RBI cannot step into the enforcement of a private award.
The bench asked the central bank to submit any rule, regulation or circular by Wednesday to establish its stand on anything that comes in the way of the implementation of the award.
The LCIA’s order on June 24 last year directed Tata Sons to pay $1.17 billion in damages for breach of contract on the grounds that the Indian group neither found a buyer nor bought back the Japanese partner’s 26 per cent stake in their telecom joint venture Tata Teleservices.
Pursuant to the Japanese telco moving the HC for enforcement of the award, Tata Sons had deposited $1.17 billion (around Rs 7,750 crore) with the registrar of the high court.
Senior advocate Soli Sorabjee, appearing for the RBI, told the court that the bank would not press its application to intervene in the matter if it can take a fresh look into the award granted in favour of DoCoMo.
This contention was opposed by senior advocates Kapil Sibal and Darius Khambata, appearing for DoCoMo and Tata Sons, respectively. The court also agreed with the companies contention saying the RBI cannot go round and round on the same issue.
The RBI has opposed the consent terms arrived at between Tata Sons and DoCoMo with regard to the enforceability of the award granted in favour of the Japanese telecom major by the LCIA in June 2016.
The RBI has also contended that that the shareholding agreement between the two companies permitting transfer of funds abroad was illegal as it violated the FEMA.