Tatas agreed to a joint venture, competed with it, later walked out and are now filing 'frivolous' petitions against it, Birlas told Supreme Court in reply to Tata Industries' plea for arbitration on mobile firm Idea Cellular.
In its counter-affidavit filed through Grasim Industries senior vice president Ashok Malu, A V Birla group said Tatas' plea for arbitration to resolve a dispute related to termination of their joint venture Idea Cellular was "frivolous and vexatious."
"(Tata) have already exited Idea Cellular by selling their shareholding to the Birla Group on the terms and conditions determined by themselves," 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 (Rs 44.06 billion) last year, TIL claims that there is need for arbitration on termination notices served on Birlas before the stake sale.
TIL had 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.
Tatas had earlier moved the apex court seeking to appoint a nominee arbitrator on behalf of Grasim as the latter had refused to appoint one.
Terming this approach as mischievous, the Birla group said the proceedings initiated by Tatas were aimed at promoting the business interests of that group's mobile telecom companies.
Birla's petition stated that under the shareholders agreement, each of the Founders was permitted to undertake an independent mobile telephony business in new telecom service areas only if Idea was not in a position to launch such new business and if another JV was not possible.
However, when the Centre announced the Unified Access Service License Policy in November 2003, Tata Teleservices exercised the option to pay an entry fee and migrate its basic services license to a new license that also offered mobile services.
"This migration was neither mandatory, nor was the fixed line services operator obligated to offer mobile telephony services," the Birla group said in its petition.
"Notwithstanding this, and in blatant violation of the shareholders agreement, the Tata group migrated to the UASL and started offering mobile services in direct competition with Idea in common service areas," it contended, saying Tatas breached the SHA as early as November 2003.
Idea Cellular was floated in October 2001.
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 the Mumbai UAS License resulted in the breach of the SHA.
This, it said, was followed "by another and equally frivolous so-called termination notice alleging that Aditya Birla Nuvo Ltd had wrongfully disclosed Idea's confidential information on its website."
It 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.