Japanese automaker Nissan sues India for outstanding dues, asks for more than $770 million

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As per a person who knew with the matter and documents reviewed by Reuters, the Japanese automaker Nissan Motor has started international settlement against India to seek more than $700 million in a clash over unpaid state incentives. The Nissan asked for payment of incentives due from the Tamil Nadu government as part of a 2008 agreement to create a car manufacturing plant in the southern state in a legal notice sent to Prime Minister Narendra Modi last year.

Nissan said that they requested again and again to state officials for the payment, due in 2015, were ignored and even a plea by the company’s chairman Carlos Ghosn to Modi last year in March asking federal assistance did not produce any results, as per the notice. In July 2016, the notice sent by Nissan’s lawyers was followed by more than dozen meetings between federal and state officials and Nissan executives, said the person who is aware of the matter of anonymity.  However, the federal officials from various ministries reassured Nissan that the payment would be made, and it should not bring a legal case.

Nissan, on the other hand, gave India an ultimatum in August to appoint a negotiator, the person said, adding the first arbitration hearing will be in mid-December. However, a Nissan spokesperson said the company was “committed to working with the government of India toward a resolution,” but not described much. The official told Reuters that “There is no discrepancy with regard to the amount due, and we are trying hard to resolve the issue”.

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