The arbitration court ruling in the DoCoMO case means the Tatas will have to pay the Japanese company slightly more than what was agreed under the shareholders agreement.

The dispute dates back to January 2015 when Japan’s NTT DoCoMo moved the London Court of International Arbitration against Tatas Sons for failing to find a buyer for its stake in Tata Teleservices.

In April 2014, NTT DoCoMo announced plans to sell its entire stake in TTSL, exiting India five years after entering the country. The exit came after the Indian company failed to achieve certain performance targets.

Under the terms of the shareholder agreement, the Tatas had to find a buyer by December 2014 failing which they had to buy the DoCoMo stake.

NTT DoCoMo had acquired a 26.5 per cent stake in TTSL for $2.7 billion (₹13,070 crore at the then exchange rate). The Japanese company is entitled to get at least ₹7,250 crore (at ₹58 per share), which is 50 per cent of its total acquisition price.

Tata Sons had applied to the RBI to purchase NTT DoCoMo’s stake, but the central bank ruled that when the put option is exercised, it should be based on the prevailing return on equity at the time the option is exercised and not based on a pre-determined valuation.

Tata Teleservices had losses of over ₹6,000 crore at that time and its valuation would have been much lower than what the Tatas had agreed to pay the Japanese firm.

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