(Corrects paragraph 6 to attribute quote to representative)
TOKYO (Reuters) - India’s Tata Sons Ltd has been ordered to pay NTT DoCoMo Inc (9437.T) $1.2 billion to buy DoCoMo’s stake in its mobile phone joint venture, the Japanese firm said, citing an international arbitration court ruling.
In 2009, the Japanese telecoms group acquired a 26.5 percent stake in Tata Teleservices Limited for around 127.4 billion rupees ($1.88 billion). In April 2014, it announced plans to exit the venture, which struggled to grow subscribers as quickly as its peers.
DoCoMo said it held the right to request that Tata find a buyer for its stake at 50 percent of the original price or at fair market value, whichever was higher. (reut.rs/28Qdp6m)
But Tata failed to find a buyer, and India’s central bank rejected Tata’s offer to buy the stake, saying a rule change in the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
The Japanese company said in a statement the award was for Tata Sons’ breach of their shareholders’ agreement.
In an emailed statement, a Tata Sons representative said the company has received the arbitration decision and is reviewing it.
“Tata Sons has always been and continues to be committed to discharge its contractual obligations in a manner consistent with the law,” the representative for the group said.
The decision comes at a time when Indian Prime Minister Narendra Modi has promised to pursue predictable policies amid concerns that foreign investments are not adequately protected in Asia’s third-largest economy.
Reporting by Chris Gallagher and Tony Munroe; Additional reporting by Himank Sharma; Editing by Edwina Gibbs