Tamil Nadu

Japanese automaker Nissan seeks time to settle $770 million dispute

Nissan tells Madras High Court that the Tamil Nadu govt. had not paid incentives with respect to the Oragadam plant.

Japanese automaker Nissan Motor on Thursday informed the Madras High Court that it required one more month to amicably settle a financial dispute it had with the Tamil Nadu government over alleged unpaid incentives to the tune of $770 million with respect to its manufaturing plant at Oragadam on the outskirts of Chennai.

Senior counsel P.S. Raman, representing Nissan Motor, told Justice Pushpa Sathyanarayana that talks were on between the automaker and government officials and that both sides required more time to arrive at a settlement. He said Additional Advocate General Narmadha Sampath too wanted the court to grant a month’s time.

When the judge wondered why a settlement had not been arrived yet, though it was nearly a year since conciliation proceedings began, the senior counsel said, “There is absolutely no backward movement. The talks have been taken forward at a steady pace but it is just that the disputing parties are yet to agree on the exact wordings of the settlement.”

Known for her sense of humour, Ms. Justice Sathyanarayana quipped: “Nissan has to accelerate better.” After a hearty laugh, the senior counsel agreed with her that the conciliatory talks were indeed moving at a “slow speed” and that they had to be given the much needed thrust and momentum required for an early settlement of the dispute.

Later, the judge directed the High Court Registry to list after a month a case filed by the State government in December 2017 with a plea to restrain the Japanese automaker from proceeding with international arbitration proceedings initiated by it against the Centre after serving an advance notice upon Prime Minister Narendra Modi in July 2016.

The company had invoked the Comprehensive Economic Partnership Agreement between Japan and India (CEPA) to initiate the arbitration proceedings in February 2017. The State government rushed to the High Court to stall the international arbitration since it was not a party to it, though the money claimed by the firm had to be eventually paid by it.

Domestic arbitration

The government contended that any dispute over non-payment of incentives could be resolved only through domestic arbitration. However, the Centre was confident of handling the issue effectively before the international arbitral tribunal and urged the High Court not to interfere with the arbitration since it was related to foreign affairs.

It was also stated before the High Court that in order to protect the interests of the State government, the Centre had nominated former Chief Justice of India J.S. Khehar to be a part of the arbitral tribunal also comprising Kaj Hober of London and presiding arbitrator Jean E. Kalicki of the United States.

A counter affidavit was also filed before the tribunal through the Centre’s attorney Mark A. Clodfelter of Washington D.C. strongly contending that India was not responsible for any of the alleged losses suffered by the automaker and that the latter had placed “fundamentally distorted and false” facts before the tribunal, the High Court was told.

On the other hand, the automaker denied all allegations levelled against it by the Centre as well as the State government and questioned the legal validity of the anti-arbitration suit filed in an Indian court.

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Printable version | Jul 5, 2020 7:28:50 PM | https://www.thehindu.com/news/national/tamil-nadu/japanese-automaker-seeks-time-to-settle-770-million-dispute-nissan-oragadam/article29729250.ece

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