tata motors: Tata Motors wins Rs 766 crore arbitration award against WBIDC in Nano-Singur case

Tata Motors, which sought to democratise car ownership in India with its ₹1-lakh Nano, has won a ₹766-crore award in an arbitration involving a state agency of West Bengal where the small-car plant, mothballed after a protracted stir over land acquisition, is located.

“With the making of the final arbitral award, the arbitral proceedings have come to an end,” Tata Motors said in a customary filing with stock exchanges, referring to its dispute with the West Bengal Industrial Development Corp (WBIDC). A three-member tribunal unanimously awarded Tata Motors a compensation of ₹765.78 crore, with interest at 11% per annum from September 1, 2016, until the actual recovery, in lieu of the investments made by the company.

Farmer stir over land acquisition had hit project
The plant, located at Singur in Hooghly district near Calcutta, became the focal point in West Bengal’s electoral politics toward the tail end of the 34-year administration of the Left Front, which carried the blame for militant unionism and the state’s industrial decline under its watch. The leitmotif of a seemingly reformed Left’s commitment toward industrialisation, the Nano plant instead became the rallying point for the Opposition, then led by incumbent chief minister Mamata Banerjee, that alleged the rights of farmers had been compromised by the state while earmarking four-crop land for the factory.

Tata Motors initiated construction of the plant dedicated to the Nano on January 21, 2007 — within a year after the election of the last Left Front government. On October 3, 2008, Tata Motors announced it was pulling out of Singur due to the political unrest and farmer group agitations over land acquisition.

The company later shifted the production of the Nano to Sanand in Gujarat.“While there’s no provision to appeal against the order of the tribunal, the aggrieved party can move an application for setting aside the reward,” said the legal expert cited above. “This can be done only on limited grounds and within 120 days of the reward being pronounced,” said the lawyer, who heads the arbitration practice at a leading law firm in Mumbai.WBIDC can move to the higher courts. That could either be the district court or a high court, depending on the seat of the arbitration, said the legal expert.

The Tata Motors statement to the exchanges doesn’t mention the seat of the arbitration. A spokesperson said the company won’t disclose more than what has already been stated to the exchanges.

The arbitration award follows the dispute between Tata Motors and WBIDC. It pertained to Tata Motors’ claim for compensation from WBIDC, covering various aspects of capital investments. These investments were related to the automobile manufacturing facility in Singur.

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