Tata, which served two termination notices to its joint venture partner the A V Birla Group before selling its over 48 per cent stake in Idea to Grasim, has sought arbitration on the ground that the Birlas allegedly violated the shareholder agreement.

The Supreme Court Justice V S Sirpurkar appointed three retired SC judges — Chief Justice A S Anand, Justice Arun Kumar and Justice P K Balasubramian — as arbitrators. Birlas had said the Tatas' plea for arbitration to resolve the dispute was "frivolous and vexatious."

If the arbitration goes in favour of the Tata group, it will have the right to buy out Birlas' stake in Idea, which was established in 2001.

The Tata Group held 48.14 per cent stake in Idea through TIL and its subsidiary Apex Investments (Mauritius) Holding. Idea Cellular was formed as a joint venture between the AV Birla Group, the Tata Group and the US-based AT&T Wireless.

In 2005, AT&T decided to exit Idea and gave the other two promoters the first right of refusal. Both Tata and Birla picked up 16.45 per cent each. This took the Tatas' stake in Idea to over 48.14 per cent with the balance held by the Birla Group.