NISSAN SUES INDIAN GOVT FOR US$770m
Carmaker seeks more than US$770m in dispute over unpaid state incentives
JAPANESE carmaker Nissan Motor has begun international arbitration against India to seek more than US$770 million (RM3.1 billion) in a dispute over unpaid state incentives, according to a person familiar with the matter and documents reviewed by Reuters.
In a legal notice sent to Prime Minister Narendra Modi last year, Nissan sought payment of incentives due from the Tamil Nadu government as part of a 2008 agreement to set up a car manufacturing plant in the state.
Nissan said repeated requests to state officials for the payment, due in 2015, were overlooked and even a plea by the company’s chairman Carlos Ghosn to Modi in March last year seeking federal assistance did not yield any results.
The notice, sent by Nissan’s lawyers in July last year, was followed by more than a dozen meetings between federal and state officials and Nissan executives, said the person.
Federal officials assured Nissan the payment would be made, and it should not bring a legal case. But, in August, Nissan gave India an ultimatum to appoint an arbitrator, said the person, adding that the first arbitration hearing would be in the middle of this month.
A senior Tamil Nadu state official said the government hoped to resolve the dispute without having to go to international arbitration.
“There was no discrepancy with regard to the amount due, and we are trying hard to resolve the issue,” said the official.
The case, brought against India for alleged violations of its Comprehensive Economic Partnership Agreement with Japan, was the latest in a string of international arbitration proceedings against the country by investors concerned about issues ranging from retrospective taxation to payments disputes.
Meanwhile, Nissan’s passenger car sales nearly halved in Japan last month, data released yesterday showed, following a 55 per cent drop in October as it struggles with a damaging inspection scandal.
Sales of passenger cars stood at 16,888 last month, down 46.8 per cent from a year earlier, said Japan Automobile Dealers Association. Agencies