Salve Vs Singhvi: The Legal Arguments Behind The Tata Sons Boardroom Battle

The Tata Sons boardroom battle has moved into a public legal face-off between two senior advocates, with Abhishek Manu Singhvi, representing Tata Trusts, and Harish Salve, advising N Chandrasekaran, offering sharply different interpretations of the company’s Articles of Association.

The immediate dispute centres on the September 17 Tata Sons Board meeting, where Tata Trusts’ two nominee directors — Noel Tata and Venu Srinivasan — voted differently on Chandrasekaran’s reappointment. Chandrasekaran, who had recused himself from the discussion, was subsequently reappointed by the Tata Sons Board. Tata Trusts has challenged the validity of the process, while Salve has defended the Board’s position.

At the heart of the legal battle are questions over Tata Trusts’ special voting rights, the Chairman’s casting vote, the duties of nominee directors and the process for appointing a Chairman.

The 1:1 Vote

The first faultline is Article 121. The provision considered by the Supreme Court in the 2021 Tata-Mistry judgment requires the affirmative vote of a majority of directors appointed under Article 104B for specified matters. It also provides for a casting vote in case of an equality of votes.

Singhvi argues that Tata Trusts currently has two nominee directors on the Tata Sons Board. Therefore, he says, a majority of two requires both nominees to concur. Since Noel Tata voted against Chandrasekaran’s reappointment while Venu Srinivasan voted in favour, Singhvi says the required majority was absent.

In his CNN-News18 interview, Singhvi also invoked Article 115, arguing that the absence of the required affirmative vote meant the Tata Sons Board lacked a quorum to consider the matter. On that interpretation, he said the Board could not proceed to discuss the merits of the reappointment in the first place.

That is Singhvi’s interpretation of how Articles 121 and 115 operate together; it has not been judicially determined in the context of the September 17 vote.

The Casting Vote

This is where the two sides' positions directly diverge.

Singhvi argues that the casting vote cannot cure the alleged absence of the affirmative vote required from Tata Trusts’ nominees. Tata Trusts has made the same argument, saying the casting vote applies to an equality of votes at the overall Tata Sons Board level and not to the separate requirement concerning Tata Trusts’ nominees.

Salve takes the opposite position. He, while speaking to CNN-News18, pointed to the casting-vote provision in Article 121 and argued that the 1:1 split between the two Tata Trusts nominees could not be allowed to paralyse Tata Sons. His position is that Tata Sons’ Articles of Association contain a mechanism to resolve an equality of votes.

The legal question, therefore, is not whether a casting vote exists. It is whether the casting vote can be used after one Tata Trusts nominee has withheld the affirmative support that Singhvi says Article 121 requires before the matter can proceed before the Tata Sons Board.

The Shareholder Question

The dispute also turns on Tata Trusts’ nearly 66% holding in Tata Sons and the governance arrangement attached to that shareholding.

Tata Trusts has only two nominee directors on the six-member Tata Sons Board, giving it one-third representation. Singhvi argues that this limited Board representation was accompanied by special affirmative rights for Tata Trusts’ nominees under the Articles. In his NDTV interview, he said the relevant provision was changed in 2014 from requiring the concurrence of all Trust nominees to requiring a majority. With two nominees today, he argues that one vote in favour is not a majority.

Singhvi also framed the issue more broadly in a September 20 post on X, saying that “fundamental rights of shareholder-owners cannot be nullified”. He also referred to the “unvarying precondition of Trust unanimity in voting” and the “clear veto” contained in the relevant provisions.

The 2021 Supreme Court judgment is relevant to this argument because it considered challenges to the special rights contained in Articles 104B and 121 and upheld the validity of those provisions. But the judgment did not decide the present dispute over how a 1:1 split between two Tata Trusts nominees should operate.

What Nominees Owe

The fiduciary-duty question adds another layer.

Singhvi has relied on the 2021 Supreme Court judgment in arguing that the special position of Tata Trusts’ nominees cannot be separated from the special provisions governing their role under Tata Sons’ Articles of Association. The judgment discussed nominee directors’ fiduciary obligations towards both the shareholder that nominated them and the company on whose Board they serve.

Salve, meanwhile, has emphasised the nominee directors’ responsibilities to Tata Sons and argued that they cannot simply be treated as delegates of the shareholder that nominated them. His broader position is that the interests and governance of Tata Sons have to be considered when its directors exercise their duties.

The dispute, therefore, is not simply about whom a nominee director represents. It is about how the directors’ fiduciary duties interact with the special affirmative rights given to Tata Trusts’ nominees under Tata Sons’ Articles of Association.

The Chairman Process

A separate legal question concerns the process for appointing the Tata Sons Chairman.

Singhvi has argued that Chandrasekaran’s fresh five-year term amounted to a new appointment and therefore required the selection process contemplated by Tata Sons’ Articles of Association. His position draws on a legal opinion by former Chief Justice of India D.Y. Chandrachud.

Salve disputes that interpretation. In his interview with NDTV, however, he did not set out his complete legal argument on the issue, saying that the detailed legal case should ultimately be argued in court rather than on television.

The 2021 Supreme Court judgment had examined Article 118 in the context of the removal of Cyrus Mistry and interpreted the provision dealing with the “same process” for removal. In the present dispute, Singhvi argues that Article 118 required a selection committee for Chandrasekaran’s fresh five-year term, pointing to the fact that the same process was followed when Chandrasekaran was reappointed in 2022.

Where Listing Fits

The listing question is another major divide between the two lawyers.

Singhvi has described listing as a “red herring” in the Chairman appointment dispute, arguing that the question of Tata Sons’ listing is separate from whether Chandrasekaran could be reappointed. NDTV Profit reported his view that the two issues should not be conflated.

Salve, on the other hand, has argued that the listing issue is the larger dispute behind the current confrontation. He has pointed to Tata Sons’ regulatory status and the Reserve Bank of India’s position, arguing that the focus on the September 17 Board meeting has diverted attention from the listing question.

The RBI rejected Tata Sons’ request to surrender its registration as a core investment company on September 11. Tata Trusts subsequently said it had not agreed to listing and that the RBI communication was discussed at the September 17 Tata Sons Board meeting.

What The Fight Comes Down To

The legal battle now centres on three immediate questions: Did the 1:1 split between Tata Trusts’ two nominees mean the Article 121 requirement was not met? Could the Tata Sons Chairman’s casting vote nevertheless resolve that situation? And did Chandrasekaran’s fresh term require the appointment process contemplated under Tata Sons’ Articles of Association?

The listing dispute forms the broader backdrop to the confrontation, but whether it has a direct bearing on the validity of Chandrasekaran’s reappointment is itself part of the disagreement between the two sides.

Ultimately, the interpretation of Tata Sons’ Articles of Association — rather than either lawyer’s television argument alone — will determine how these competing claims are resolved if the dispute reaches the courts.