Tata Motors on Monday announced that they have secured an arbitration award worth Rs 766 crore as compensation for its investment in the now-defunct Singur plant. The Singur plant was initially intended for the production of Tata Nano cars.
This arbitration stems from a dispute between Tata Motors Limited (TML) and West Bengal Industrial Development Corporation Limited (WBIDC). The conflict pertained to TML's claim for compensation from WBIDC, which covered various aspects of equity investments. These investments were linked to automobile manufacturing facilities in Singur, West Bengal. The much-awaited arbitration proceedings recently concluded with a unanimous decision handed down on October 30, 2023 in favor of Tata Motors.
“In respect of the arbitration proceedings between Tata Motors Limited ('TML') and West Bengal Industrial Development Corporation Limited ('WBIDC'), in relation to TML's claim for compensation from WBIDC on various grounds, on account of loss of capital investment, in respect of its automobile manufacturing plant at Singur (West Bengal), we hereby inform you that the arbitration proceedings pending before a three-member arbitration panel have finally been resolved by unanimous decision dated 30 October 2023 in favor of TML. The Company has therefore said that the claimant (TML) has been held to be entitled to recover from the respondent (WBIDC) a sum of INR .765.78 crore with interest at 11% per annum from September 1, 2016 till actual recovery thereof.
“The Claimant (TML) has also been held to be entitled to recover from the respondent (WBIDC) a sum of INR .1 crore towards the cost of the proceedings,” the exchange filing said.
Under the award, Tata Motors will be entitled to recover a total sum of INR 765.78 crore, along with interest at the rate of 11 percent per annum, commencing from September 1, 2016, until full recovery is achieved from WBIDC.
This development represents a major milestone for Tata Motors as it underscores its successful endeavor to offset capital investments associated with the Singur plant. The award not only recognizes the merits of its claim, but also has financial implications that will support the company's operations and ongoing efforts.