Tata is suing rival Liberty Steel over claims of unpaid debts, according to a report.
The claim relates to missed payments from Liberty’s flagship £100m takeover of Tata’s speciality steels business in 2017, the Daily Telegraph said.
Liberty Steel owner GFG Alliance is reeling from the collapse of its main backer Greensill in early March.
The 2017 acquisition made GFG Alliance owner Sanjeev Gupta one of the UK’s biggest steel magnates.
Tata has launched proceedings against Liberty Speciality Steels, Liberty House Group PTE and Speciality Steel UK, the Telegraph said.
A Tata spokesman said: “This is an active court case and as a result we are not making any further comment.”
GFG Alliance was approached for comment.
Liberty’s future was thrown into doubt after the collapse of Greensill, sparking speculation about the future of thousands of jobs and calls for the government to step in to save the steel company.
A request by GFG to the UK government for £170m to support the UK operation has been rejected by Business Secretary Kwasi Kwarteng, although the government has pledged to preserve Liberty in some form.
The government has said it “continues to engage closely with the company, the broader UK steel industry and trade unions”.
Despite Mr Gupta’s race to refinance his business after Greensill’s collapse, he told the BBC earlier this month that none of Liberty Steel’s plants would shut “under my watch”.
Some investors have also begun legal action to have parts of his metals group wound up.
But Mr Gupta said he and GFG Alliance, Liberty Steel’s parent company, were “not waiting for anybody” and were “doing what we can to help our businesses”.
“Our overall global operations are profitable, we have refinancing offers, we will refinance, and we will support our UK business also,” Mr Gupta told the BBC.
“None of my steel plants under my watch will be shut down,” he said.