Can a settlement to the Tata-NTT Docomo spat be arrived at only by giving a non-repatriation assurance by the Japanese firm? According to legal circles, the Japanese company will have to seek approvals from appropriate authorities, including the Reserve Bank of India, for a change in the end-use clause for this particular investment. The end-use clause specifies where the money will be invested.
Friction pointDocomo’s investment in Tata Teleservices, its joint venture with Tata Sons, has become a subject of deep discord between the partners. Following the stand taken by the RBI, Tata Sons had declined to pay the Japanese firm the money as envisaged in the shareholders’ agreement for relinquishing its shares in Tata Teleservices. Despite NTT Docomo getting a favourable verdict in international arbitration, the issue remains unresolved.
A change in end-use clause would give NTT Docomo the elbow-room to use the funds thus obtained after giving a non-repatriation assurance for investment in specified activities approved by the authorities concerned.
In the wake of the Tata-Docomo fracas, legal circles felt that there was a need to re-define rules for such cases having larger implications beyond the corporate world.
