Nissan dispute: State insists court to stall int’l arbitration

Times of India | 22 March 2018

Nissan dispute: State insists court to stall int’l arbitration

Chennai: A week after Japanese automaker Nissan hinted at the scope of an amicable solution with the Tamil Nadu government over unpaid tax refunds of nearly $770 million, the state on Wednesday insisted that the Madras high court hear its plea to stall the international arbitration initiated by company and grant an interim relief.

“We are aggrieved by the international arbitration, there is some urgency on our side, we are ready to proceed with the hearing of the case, and the court need not defer the hearing,” advocate-general Vijay Narayan said.

To this, Justice Anita Sumanth said, “What is the urgency when Tamil Nadu is not even a party to the arbitration. How the application is maintainable.”

Narayan responded saying the state government and Nissan had arbitration agreement between them and therefore the application is very well-maintainable.

However, senior counsel P S Raman for Nissan pleaded the court to post the hearing to June, after the summer vacation, as there is no urgency. “Even the next hearing of the arbitration proceeding is scheduled only on November 6,” he added.

Recording the submission, the judge posted the plea to April 5 to decide the maintainability of the application.

On March 16, Nissan informed the high court that the state had initiated talks with the company and sought the court to defer the hearing of the plea.

As no one represented the state, the judge said she could not take a decision on deferring the hearing without hearing the state and posted the plea to Wednesday for the state to submit its stand.

In December 2017, the government moved the high court seeking an interim injunction against Nissan from proceeding with its arbitration against India over unpaid tax refunds of nearly $770 million.

The state alleged that Nissan had invoked the international arbitration contained under the Comprehensive Economic Partnership Agreement (CEPA) between India and Japan to ‘coerce the Tamil Nadu government’.

However, the Central government filed an affidavit saying the state government did not have locus standi to challenge the international arbitration proceedings.

source: Times of India