New Delhi: The Permanent Court of Arbitration in Singapore has rejected India’s argument that the court does not have the jurisdiction to rule on a case brought against India by Japan’s Nissan Motor, according to two people and documents reviewed by Reuters.
If India had won the plea, the entire case would have been thrown out, said one of the people who has direct knowledge of the matter, adding the Indian government is likely to file an appeal with Singapore’s Supreme Court.
Nissan sent a legal notice to the government in 2016 claiming more than Rs 5,000 crore ($720 million) in a dispute over incentives it said were due from Tamil Nadu as part of a 2008 agreement to set up a car manufacturing plant there.
The Japanese car maker brought the case against India for alleged violation of a Comprehensive Econo-mic Partnership Agree-ment (CEPA) the country has with Japan. The CEPA gives some protections to Japanese firms investing in India and vice-versa.
India, which according to the source agreed to have the arbitration in Singapore, filed a plea in 2017 saying the arbitration court in Singapore does not have the authority to rule on the case for many reasons, including that it was a tax-related matter outside the purview of the CEPA with Japan.
The international tribunal, in a 140-page order dated April 29, denied India’s objections, saying it has the authority to rule on the matter and would hold the final hearing in February 2020 after submission of evidence and arguments from both sides.
The order has not previously been reported.
Nissan said in a statement it “continues to work with the government to resolve this matter”.
The case is one of a string of arbitration proceedings against India by investors including Vodafone Group, Cairn Energy and Deutsche Telekom over issues ranging from retrospective taxation to payment disputes.