Terming Tatas Industries petition for arbitration on Idea Cellular as frivolous, the Birlas, on Wednesday, told the Supreme Court that the Tatas had agreed to a joint venture, competed with it and later walked out.
Termination of JV In its counter-affidavit filed through Grasim Industries Senior Vice President Ashok Malu, A V Birla Group said Tata’s plea for arbitration to resolve the dispute related to termination of their joint venture Idea Cellular was “frivolous and vexatious.”
“They (Tata) have already exited Idea Cellular by selling their shareholding to Birla Group on the terms and conditions determined by themselves,” the Birla Group submitted.
Though Tata Industries Ltd (TIL) and its subsidiary Apex Investments (Mauritius) Holding sold their 48.14 per cent stake in Idea to Grasim for Rs 4,406 crore last year, TIL claims that there is need for arbitration on termination notices served on Birlas before the stake sale. TIL had also served two notices seeking to terminate their joint venture with Birlas on the ground that the latter had violated the shareholders agreement. If the arbitration is settled in Tata Group’s favour, it will have the right to buy out Birlas’ stake in Idea.
A bench headed by Justice V S Sirpurkar has posted the matter to September 17 for further hearing. Breach of pact
While seeking to quash Tatas’ plea, Birla Group alleged that instead of complying with the law on cross-holding, TIL on January 31, 2006 issued a “frivolous” notice alleging that Birla Group company ABTL’s application for Mumbai UAS License resulted in the breach of the share holders agreement.
Further, Birlas also argued that TIL had no right to seek arbitration, as the JV was between Tata Group and Birla Group and not with individual companies.
