Nis­san Mo­tor moves Ar­bi­tral Tri­bunal

In Madras High Court, Tamil Nadu ac­cused the com­pany of sur­rep­ti­tiously ob­tain­ing an or­der from in­ter­na­tional tri­bunal

The Hindu - - SOUTH - Mo­hamed Im­ran­ul­lah S.

The dis­pute be­tween Ja­panese au­tomaker Nis­san Mo­tor and In­dia with re­spect to in­cen­tives of $770 mil­lion re­port­edly due to the com­pany from the Tamil Nadu gov­ern­ment has got mired into a big­ger le­gal tan­gle. While the State gov­ern­ment has ap­proached the Madras High Court to re­strain the com­pany from pro­ceed­ing with in­ter­na­tional ar­bi­tra­tion, the lat­ter has moved the In­ter­na­tional Ar­bi­tral Tri­bunal to for­bear the gov­ern­ment from pro­ceed­ing with the case in the High Court.

Jus­tice Anita Su­manth of the Madras High Court on Thurs­day dubbed “un­for­tu­nate” the au­tomaker’s at­tempt to stall the pro­ceed­ings pend­ing be­fore her af­ter hav­ing ac­cepted no­tice on the State gov­ern­ment’s pe­ti­tion on Mon­day. The ob­ser­va­tion was made af­ter Ad­vo­cate-Gen­eral Vi­jay Narayan, rep­re­sent­ing the State gov­ern­ment, ac­cused the com­pany of hav­ing “sur­rep­ti­tiously ob­tained an or­der from the tri­bunal at 3 a.m. last night on its ap­pli­ca­tion for ur­gent in­terim re­lief.”

In his sub­mis­sions, Ad­di­tional So­lic­i­tor-Gen­eral (ASG) G. Ra­jagopalan urged the court to sim­ply ad­journ the case by two weeks for fil­ing a counter-af­fi­davit by the Cen­tre.

“Ac­tu­ally on mer­its, we are sup­port­ing the Gov­ern­ment of Tamil Nadu,” he said, and added in the same breath that in­ter­fer­ence by lo­cal courts in in­ter­na­tional ar­bi­tra­tion would have its own ram­i­fi­ca­tions. Ac­ced­ing to his re­quest, the judge ad­journed the case to De­cem­ber 20 for fur­ther hear­ing.

Dur­ing the course of ar­gu­ments, Se­nior coun­sel P.S. Ra­man, ap­pear­ing on be­half of Nis­san Mo­tor, de­nied the al­le­ga­tions of the com­pany hav­ing taken any steps to stop the pro­ceed­ings be­fore the High Court. He pointed out that an ur­gent in­terim re­lief had been sought only against the Cen­tre. How­ever, Mr. Narayan said the com­pany had worded its plea so “clev­erly” that a di­rec­tion was sought against the State gov­ern­ment too from con­duct­ing the case in the High Court.

He also pro­duced a copy of the or­der passed by the tri­bunal com­pris­ing Kaj Hober of Lon­don, former Chief Jus­tice of In­dia Jagdish Singh Khe­har and the pre­sid­ing ar­bi­tra­tor Jean E. Kal­icki from the United States. The or­der stated that it had been passed un­der the 2013 Ar­bi­tra­tion Rules of the United Na­tions Com­mis­sion on In­ter­na­tional Trade Law (UNCITRAL) and the 2011 Com­pre­hen­sive Eco­nomic Part­ner­ship Agree­ment (CEPA) be­tween Ja­pan and the Repub­lic of In­dia.

It be­gan with an ob­ser­va­tion that Ar­ti­cle 96(21) of the CEPA makes it clear that an in­ter­na­tional ar­bi­tra­tion tri­bunal con­sti­tuted un­der its aus­pices was em­pow­ered to rule on any ob­jec­tions to its ju­ris­dic­tion and pointed out that in the present dis­pute, In­dia had raised such an ob­jec­tion by con­tend­ing that in­vest­ment dis­putes would not fall within the com­pe­tence of the tri­bunal. Nis­san Mo­tor too had agreed to a pre­lim­i­nary hear­ing to de­cide the is­sue of ju­ris­dic­tion.

Con­fer­ence call

It was also de­cided that a con­fer­ence call be­tween the par­ties and the tri­bunal would be held on De­cem­ber 14 to lay down the pro­ce­dures and timetable for hear­ing the is­sue of ju­ris­dic­tion. In the mean­time, since Nis­san Mo­tor ap­pre­hended that the case filed by the Tamil Nadu gov­ern­ment in the Madras High Court would im­peril the ar­bi­tra­tion pro­ceed­ings, the tri­bunal di­rected the au­tomaker as well as In­dia to take all nec­es­sary steps to en­sure that the High Court does not in­junct ar­bi­tra­tion pro­ceed­ings at least un­til the is­sue of pre­lim­i­nary is­sue of ju­ris­dic­tion was re­solved.


A file pic­ture of the Nis­san Auto In­dia plant in Chennai.

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