Event 1908 Could not find the domain controller for this domain

Hi,

I'm trying to add new 2012 domain controller to existing Windows Server 2003 domain. 

I'm getting following error in eventlog on my 2012 server:

The Active Directory Domain Services Installation Wizard (Dcpromo) was unable to establish connection with the following domain controller.

Domain Controller:

servername.domain.local

Additional data:

Error value:

1908 Could not find the domain controller for this domain.

I have also run dcdiag on 2003 server and it shows no errors. It's not a DNS issue either. Server 2012 can ping the domain.local and 2003 DC without any issues.