Tata Motors Awarded Rs 765.78 Crore Compensation in Singur Manufacturing Plant Dispute

In a recent development in Tata Motors and WBIDC case, the arbitral tribunal has rendered a unanimous verdict in favour of Tata Motors regarding their claims concerning the Singur manufacturing unit.

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The tribunal, in its ruling, has directed the West Bengal Industrial Development Corporation (WBIDC) to make a substantial payment of Rs 765.78 crore to Tata Motors, along with an 11 per cent interest rate on the awarded amount. Additionally, Tata Motors has asserted its right to recover an additional Rs 1 crore from WBIDC to cover the expenses incurred during the legal proceedings.

The dispute started in October of 2008 when the automobile manufacturer was compelled to relocate its manufacturing plant from Singur in West Bengal to Sanand in Gujarat due to a land dispute. 

Tata Motors had initiated this legal action seeking compensation from WBIDC on various grounds, including losses associated with capital investments related to their automobile manufacturing facility in Singur. The plant was initially made for the production of Nano cars.

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The Singur plant was initially made for the production of Nano cars

“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 of compensation from WBIDC under various heads, on account of the loss of capital investments, with regard to the automobile manufacturing facility at Singur (West Bengal), this is to inform that the aforesaid pending Arbitral proceedings before a three member Arbitral Tribunal has now been finally disposed of by a unanimous Award dated October 30, 2023 in favour of TML whereby the claimant (TML) has been held to be entitled to recover from the respondent (WBIDC) a sum of Rs.765.78 crore with interest thereon @ 11% p.a. 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 Rs.1 crore towards cost of the proceedings.” Said the company in a stock exchange filing.

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Furthermore, The automaker said, “With the making of the final arbitral award as mentioned above, the Arbitral proceedings have come to an end.”

In response to the tribunal's ruling, the Trinamool Congress (TMC), which currently holds power in the state, has stated that it does not consider this as the "final verdict" and has emphasised that legal avenues remain open before the Mamata Banerjee-led government.