Nissan claims to be the India of state aid not paid

by Aditi Shah

NEW DELHI (Reuters) – Nissan (T:7201) Motor requires more of $ 770 million (646 million euros) in the indian State for non-payment of public assistance and has opened a procedure of international arbitration, according to a source aware of the dossier and the documents, which Reuters has taken notice.

The partner of Renault (PA:RENA) had reported the last year the indian Prime minister, Narendra Modi, that it required the payment of aid owed by the State of Tamil Nadu in accordance with an agreement concluded in 2008 with a view to install a manufacturing plant of automobiles.

In the document sent by the attorneys for the car manufacturer nippon to the Prime minister in July 2016, Nissan says that his repeated requests to secure the payment of these aids, which was due in 2015, have never obtained the slightest answer, and adds that the personal intervention of president Carlos Ghosn with Modi himself, in march 2016, has not yielded any results.

Several meetings between officials of Nissan and the federal and local authorities in india have followed the sending of this document, according to the source close to the folder.

Senior officials from several ministries have assured Nissan that the aid would be paid without the need to enter the courts, but in August 2016 the manufacturer has sent an ultimatum to New Delhi to open an arbitration process, which must give rise to an initial hearing in mid-December, has continued the source.

NISSAN SAID IT IS WORKING ON A SOLUTION WITH NEW DELHI

A spokesman for Nissan said, without other precision, that he had “the willingness to work toward a solution with the indian government”.

A top official of the Tamil Nadu said that the State of south India hoped to resolve the litigation without going through an international arbitration.

The Prime minister did not respond to an email requesting comment.

This is not the first case of commercial disputes to which India is facing, foreign investors resorting to a procedure of arbitration in cases involving both aid and public tax retroactive.

It is as well as twenty proceedings are underway against India, one of the highest numbers involving a sovereign State.

Manufacturers such as Ford and Hyundai Motor are located in Tamil Nadu, whose capital, Chennai, the former Madras, is known as the “Detroit of south Asia”.

Nissan and Renault have invested 61 billion rupees (780 million euros) in a site at Chennai, with an annual production capacity of more than 480,000 vehicles.

Nissan does not specify what is the impact of the litigation on this site, but he had said in 2008 that the State aid and local were crucial to ensure its success.

(Wilfrid Exbrayat for French service, edited by Marc Angrand)