Tata Sons-Tata Trusts rift heads to court as Salve and Singhvi enter fray

The long-simmering dispute between Tata Sons and Tata Trusts appears headed for the courts, with two of India's most prominent senior advocates preparing to represent the opposing sides.

Harish Salve is expected to appear for Tata Sons, while Abhishek Manu Singhvi is advising Tata Trusts and is likely to represent Noel Tata or the Trusts. Singhvi, a Rajya Sabha member who represented Tata Sons in 2021 in the Cyrus Mistry matter, said on X that he was joining the dispute as lead lawyer for one side and regretted that the issues could not be settled amicably, recalling earlier work with Ratan Tata.

In his view, the Supreme Court's 2021 judgment in the Tata-Mistry case gave the Trusts primacy in their relationship with Tata Sons and upheld the special Articles. He said unanimity in Trust voting and veto provisions had been applied for decades, and that a relationship of more than a hundred years should not be severed. Without collegiality, he said, the matters would need legal resolution.

The immediate trigger is a decision by the Tata Sons board on Thursday to approve a five-year term for chairman N Chandrasekaran in a 4-1 vote, after he had said in August that he would not seek another term. Noel Tata, chairman of Tata Trusts, which holds about 66% of Tata Sons, voted against the move, while the Trusts' nominee Venu Srinivasan voted in favour.

The board also decided by majority to take steps towards a public listing after the Reserve Bank of India rejected a Tata Sons application for deregistration as an upper layer non-banking finance company.

On Sunday, Tata Trusts said the September 17 resolution is void ab initio. It said Article 121 of Tata Sons' Articles of Association requires the affirmative vote of a majority of Trust-nominated directors, and that a casting vote applies only where board votes are equal. It added that Tata Sons has voluntarily adopted governance practices of public companies.

Salve, a former Solicitor General of India who has acknowledged advising Tata Sons and Chandrasekaran, spoke from London about a possible listing. He described the Tata Group as India's largest corporate enterprise and "the face of India", noting that it holds assets received from the government, including Air India, does defence work for the government and is setting up hydrogen projects.

"They are a global institution. A global institution cannot be run by three trustees saying we want it to go by our culture, what culture are we talking about? Today, in the day and age of transparency, an institution must refresh itself from time to time and the best talent must run this institution for the sake of not just the company, not for the shareholders, but for India," he said.

With both sides now marshalling legal firepower, the battle that began in the boardroom looks set to shift to the courtroom.