Nissan sues India for Rs. 5,000 crores over outstanding dues

Japanese car maker Nissan has sued India for Rs. 5,000 crore over a pending settlement of incentives promised by the state government of Tamil Nadu.

Nissan and the state government had signed an agreement to setup a car manufacturing plant in Tamil Nadu back in 2008. As part of the agreement, the government had promised several incentives including tax refunds that were never fulfilled. According to Nissan, the government owes Rs. 2,900 crores in incentives and is claiming an additional Rs 2,100 crore in damages, interest and other costs.

It has been reported that Nissan had sent a legal notice to the Prime Minister seeking payment of incentives due as part of the 2008 agreement. In 2016, Nissan chairman Carlos Ghosn wrote to the Prime Minister seeking his help. Numerous meetings were held between Nissan executives and officials in the national and state governments which yielded assurances that the payment would be made. However, no payments were made. 

Nissan eventually gave India an ultimatum to appoint an arbitrator. The first arbitration hearing will reportedly be held in mid-December 2017, where India will have to respond to allegations of violations of its Comprehensive Economic Partnership Agreement with Japan.

Apparently, this is not the only case leveled against India. Over 20 such cases are reportedly pending.

Source: Reuters