Tata Motors (NYSE:TTM) Ltd (TML) has emerged victorious in a long-standing legal dispute with the West Bengal Industrial Development Corporation (WBIDC) over compensation claims related to the Singur vehicle production facility. The conflict was centered around TML's capital investment loss that arose due to complications at the Singur plant.
A three-member arbitral tribunal delivered a unanimous verdict awarding TML Rs 765.78 crore ($10.2 billion) with an annual interest of 11% from September 1, 2016, until full recovery. In addition to this, TML is entitled to recoup Rs 1 crore ($133,333) for legal expenses, thereby concluding the arbitration process.
The origins of this dispute date back to 2006 when the Left Front government had secured about 1,000 acres in Singur, Hooghly for TML's Tata Nano manufacturing. This move was met with opposition by Mamata Banerjee, who was then the opposition leader and is now the current Chief Minister. The opposition led to the termination of the Singur project.
As a result of the issues at Singur, TML relocated its operations to Gujarat, establishing a new plant in Sanand for Tata Nano production. The company moved their Nano project from Singur to Sanand in October 2008 due to land acquisition protests. This relocation led to a compensation claim for lost capital investments at Singur.
This ruling by the arbitral tribunal allows Tata Motors to recover Rs 766 crore including interest from WBIDC in the Singur-Nano project case.
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