Cyrus Mistry has won backing from a tribunal to be reinstated as executive chairman of Tata Sons, the holding company behind Indian conglomerate Tata Group, lawyers said on Wednesday, knocking shares in group companies.
Mistry has been embroiled in a legal battle with Tata Group since being ousted in 2016 over charges of shareholder oppression and mismanagement.
Tata Sons has four weeks to file an appeal with India's top court over the ruling of the quasi-judicial National Company Law Appellate Tribunal (NCLAT), one of the lawyers said.
Mistry called the judgment "a victory for the principles of good governance and minority shareholder rights".
"The outcome of the appeal is a vindication of my stand taken when the then board of Tata Sons, without warning or reason, removed me, first as the executive chairman and subsequently as a director of Tata Sons," Mistry said in a statement.
"I believe it is now time that all of us work together for sustainable growth and development of the Tata Group."
Tata Sons did not immediately respond to a request for comment.
Shares in group company Tata Motors fell 3%, Tata Global Beverages nearly 4% and Indian Hotels Company finished nearly 3% lower.
Mistry had also contested his removal as chairman and alleged inappropriate interference in the company's affairs by family patriarch and the conglomerate's former chairman, Ratan Tata.
The NCLAT two-judge bench in its ruling deemed the appointment of current Tata Sons chairman N Chandrasekaran illegal and asked Ratan Tata not to interfere, one of the lawyers said.
Tata Group is one of India's oldest and biggest conglomerates with interests in sectors including technology, steel and automobiles.
The clash between Mistry and Ratan Tata has been one of the most high-profile and publicly fought corporate battles in India.
Mistry is a scion of the Shapoorji Pallonji family that holds a minority stake in Tata Group.
Tata Trusts, a group of public charities, owns a controlling 66% stake in holding company Tata Sons and is chaired by Ratan Tata.