Nissan Motor has started international arbitration against India to seek over $770 million in a dispute concerning overdue state incentives, according to an individual knowledgeable about the matter and files examined by Reuters.
In a legal notice sent to Prime Minister Narendra Modi two years ago, Nissan looked for payment of incentives due from the Tamil Nadu government as part of a 2008 agreement to establish a car manufacturing plant in the state.
Nissan stated repeated requests to state officials for the payment, due in 2015, were ignored and even a plea by the company’s chairman, Carlos Ghosn, to Modi in March of 2016 seeking federal assistance did not yield any outcomes.
The notice, sent by Nissan’s lawyers in July 2016, was followed by over a dozen meetings between federal and state authorities and Nissan executives, stated the individual knowledgeable about the matter.
The federal authorities, from a number of ministries, assured Nissan the payment would be made, and it needs to not bring a legal case. However, in August, Nissan gave an ultimatum to designate an arbitrator, the person stated, adding the first arbitration hearing will take place in mid-December.
A Nissan representative stated the company was “committed to working with the government of India towards a resolution.”
A senior Tamil Nadu state official stated the government wanted to solve the dispute without having to go to international arbitration. “There is no discrepancy with regard to the amount due, and we are striving to deal with the problem,” the authorities informed Reuters.