People attend a product unveiling event of NTT Docomo in Tokyo, Japan, May 11, 2016. _ REUTERS
People attend a product unveiling event of NTT Docomo in Tokyo, Japan, on May 11, 2016. Photo: Reuters

With Natarajan Chandrasekaran annointed as chairman of the holding company, the Tata group is turning its attention to resolving issues, namely its row with Japan’s NTT Docomo.

The US$108 billion salt-to-software conglomerate has started talks in a bid to settle a 2014 dispute with the Japanese telecom company even before Chandrasekaran formally takes over on February 21, financial daily, the Business Standard, reported.

The dispute is over Tata’s non-compliance of a financial agreement when Docomo decided to exit the Indian market in 2014.

Under the contract signed between Ratan Tata and Docomo in 2009, the Tata Sons was to have bought back Docomo’s 26.5% stake in Tata Teleservices by paying at least half of the acquisition price within five years.

However in 2014, when Docomo decided to exit India, Tata Sons refused to buy back the shares at the pre-determined price. It cited a Reserve Bank of India regulation for objecting to the transaction based on a pre-fixed price.

Docomo had asked Tata to buy back shares at US$1.2 billion but Tata Sons offered a lower exit price. Docomo’s original investment in 2009 was valued at US$2.2 billion.

Docomo then sued Tata Sons in both the United States and the United Kingdom, as well as pursiung litigation in the Delhi High Court over the matter. But Tata Sons did not pay, even after an international arbitration panel ordered the company to pay US$1.17 billion to NTT Docomo for breach of contract.

In July 2016, a UK court passed an ex-parte order in favour of Docomo, allowing the company to realize the amount of the award against Tata’s assets in the UK, subject to Tata Sons contesting the adjudication.

In response, Tata Sons argued that Docomo could not attach Tata Motors’ or Tata Steel’s properties in the UK, as Tata Sons was a minority shareholder in these ventures.

When Cyrus Mistry was removed as Tata Sons chairman on October 24, one of the allegations made against him was that he had handled the dispute with Docomo on his own, without informing Tata Sons.

However, Mistry denied the charge and claimed that he had kept Ratan Tata abreast of all developments regarding the group’s dispute with Docomo.