With the change of guard at Tata Sons, the dispute with Japanese major NTT DoCoMo may get diffused in the coming weeks. According to sources close to the two companies, the two sides are expected to meet soon to try and evolve a middle path.
The options include a quid pro quo formula, whereby NTT DoCoMo suspends all its international actions against the Tatas, and in return, the Indian company may back the Japanese firm’s plea in the Delhi High Court to enforce the arbitration award of $1.17 billion.
“The people who were opposing a compromise within the Tata Group have been eased out. With Ratan Tata at the helm, there is going to be a move towards giving importance to honouring commitments,” said an executive associated with the Japanese company.
Sources close to the Tata camp acknowledged there will be a change in approach. “The deal with NTT DoCoMo was done when Ratan Tata was at the helm. Now that he is back, it is unlikely that he will not do something about trying to resolve the dispute amicably.”
The handling of the dispute is understood to be one of the key issues that led to a difference of opinion between Cyrus Mistry and the Tata Sons board.
“The issue has affected the Tata brand in the international market with NTT DoCoMo dragging the Indian company to courts in London and elsewhere. This approach appeared to be different to what Tatas have been known for,” said a brand consultant who had worked on a Tata campaign a few years back.
The dispute revolved around payment of $1.17 billion to NTT DoCoMo for its stake in Tata Televentures. Under an earlier agreement, Tatas had agreed to pay the money to the Japanese company. However, a new law governing foreign exchange prevented Tata from paying a pre-determined value for the stake held by NTT DoCoMo.
The trouble started after DoCoMo got a ruling from a London tribunal asking Tata to pay the amount. Instead of backing the award, Tata filed an appeal with the Delhi High Court.