New Delhi, Sept. 21 -- A boardroom dispute at one of India's most closely watched business groups is now threatening to spill into the legal arena.

The escalating Tata Trusts-Tata Sons confrontation over N Chandrasekaran's reappointment and the future of Tata Sons' listing has turned a leadership disagreement into a wider governance battle, leaving investors to assess how much uncertainty could still be priced into Tata Group stocks.

Tata Trusts, headed by Noel Tata, has legally challenged the Tata Sons board's decision and is seeking judicial intervention to maintain the status quo on Chandrasekaran's tenure. Reports said the Trusts were weighing legal options, including possible proceedings before the National Company Law Tribunal.

I...