Tribunal awards $92 million compensation to Tata for Singur plant losses

Tata Motors on Monday announced that it has won the arbitration proceedings in the Singur automobile manufacturing facility case against the West Bengal government and will recover a sum of ₹766 crore ($92 million) including interest.

The case pertained to a compensation claim by Tata Motors Ltd (TML) from West Bengal Industrial Development Corporation Ltd (WBIDC) under various heads, on account of the loss of capital investments concerning the stalled Tata Nano project at Singur in Hooghly district. 

“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 30 October 2023 in favor of TML whereby the claimant (TML) has been held to be entitled to recover from the respondent (WBIDC) a sum of ₹765.78 crore with interest thereon @ 11% p.a. from 1 September 2016 till actual recovery thereof,” Tata Motors said in a BSE filing.  

“The claimant (TML) has also been held to be entitled to recover from the respondent (WBIDC) a sum of ₹1 crore ($120,000) towards cost of the proceedings. With the making of the final arbitral award as mentioned above, the arbitral proceedings have come to an end,” it added. 

The ruling Trinamool Congress (TMC) which is now in power in the state said it is not the “final verdict” and legal avenues are still open before the government.

The case pertains to Tata’s Nano factory in Singur for which the erstwhile Left Front government acquired nearly 1,000 acres of land in 2006. However, the carmaker was forced to abandon the plan following protests led by the then opposition leader and TMC chief Mamata Banerjee. 

Tata Motors then moved to Gujarat and set up a plant in Sanand for manufacturing the Tata Nano. 

After the TMC came to power in 2011, the government led by chief minister Mamata Banerjee brought the Singur Land Rehabilitation and Development Act, 2011, and took over 997 acres citing non-performance by Tata Motors. After a Calcutta High Court verdict declaring the Act unconstitutional and void, the West Bengal government moved the Supreme Court which ruled in the government’s favor in 2016. The apex court set aside the land acquisition for Tata’s Nano project in Singur, and ordered the state government to return the land to their original owners.