 "Tata Motors wins Rs 766 crore plus interest at 11% for losses in Singur")
Tata Motors has won an arbitral award of Rs 765.78 crore plus interest as compensation for its investment in Singur, the erstwhile site for the production of the Nano.
In a stock exchange filing on Monday, the company said that in respect of the arbitration proceedings between Tata Motors Ltd (TML) and West Bengal Industrial Development Corporation Ltd (WBIDC), a three-member Arbitral Tribunal had disposed of by a unanimous award dated October 30, 2023, in favour of TML.
The claims pertain to TML’s compensation from WBIDC under “various heads, on account of the loss of capital investments” regarding the manufacturing facility at Singur, from where the carmaker had pulled out in October 2008 in the face of mounting agitation.
With the final arbitral award, the Arbitral proceedings have come to an end, the company said in its filing.
TML has been held to be entitled to recover from the WBIDC a sum of Rs 765.78 crore with interest thereon at 11 per cent per annum from September 1, 2016, until actual recovery.
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With interest, the compensation to Tata Motors could be in excess of Rs 1,350 crore as on date.
The company is also entitled to recover Rs 1 crore from WBIDC towards the cost of the proceedings.
Sources in the West Bengal government said it had just received the arbitral order, and that "we are working on it".
The arbitral award is yet another chapter in the Singur saga starting in 2006 when Tata Motors announced the Nano project.
The project was marked by sporadic disruptions but an indefinite agitation backed by Mamata Banerjee (then in the Opposition in the state) for the return of land to the “unwilling” land losers ultimately resulted in Tata Motors relocating the project to Sanand in Gujarat in 2008.
Tata Motors had invested more than Rs 1,800 crore in establishing the plant that were almost ready to roll out the cars.
The land agitation, in a way, changed the course of Bengal politics. In the assembly election that followed in 2011, the Left Front was decimated by Mamata Banerjee-led Trinamool Congress. An ordinance was issued to reclaim the disputed land in Singur. It was followed by the Singur Act to vest the project land.
Finally, on August 31, 2016, the Supreme Court directed the state government to take possession of the land and re-distribute it to the owners.
Tata Motors started seeking compensation for its losses after the apex court set aside the acquisition of 997 acres by the Left Front-led government to help it set up the Nano plant in Singur.
In early 2017, the company wrote to WBIDC seeking compensation of Rs 934 crore, which included the sunk cost and interest on it. However, it was rejected by WBIDC and the matter then moved to arbitration, culminating in a unanimous award on Monday.
The Singur saga
May 18, 2006: Tata Motors announces Nano plant in West Bengal
October 3, 2008: The carmaker decides to move out of Singur
August 31, 2016: SC quashes land acquisition for Tata Motors in Singur
February 2017: Tata Motors writes to WBIDC claiming compensation
October 30, 2023: It wins arbitral award of Rs 765.78 crore plus interest as compensation