Cal HC rejects WBIDC’s plea for unconditional stay of arbitration award to Tata Motors

Kolkata, The Calcutta High Court on Thursday declined to hear the WBIDC’s prayer for an unconditional stay of an arbitration award in favor of Tata Motors over a dispute over land allotted for setting up an automobile manufacturing unit in Singur.

The court imposed various terms and conditions on the award-debtor, West Bengal Industrial Development Corporation Ltd for imposing a stay on the arbitration award passed on 30 October 2023.

Delivering the judgment, Justice Aniruddha Roy observed that the disputes between WBIDC and Tata Motors arose regarding the allotment of land for setting up an automobile manufacturing unit at Singur in West Bengal’s Hooghly district, for which land was provided by petitioner WBIDC.

After a prolonged agitation against land acquisition led by then opposition leader Mamata Banerjee, Tata Motors left Singur to set up the Nano car plant in Gujarat’s Sanand in October 2008.

An arbitral tribunal on 30 October 2023 made an award in favor of Tata Motors for a total amount of ₹765.78 crores along with interest at the rate of 11 percent per annum.

WBIDC challenged this award in the High Court and prayed for an unconditional stay of its operation.

The court noted that the grant-debtor/applicant is a state-owned company in which the state is an interested party.

In the judgment, Judge Roy imposed certain terms and conditions on WBIDC for the suspension of the award.

He directed that after calculating the entire principal and interest amount under the award as on the date of judgment, WBIDC shall within eight weeks provide an undertaking by way of an affidavit along with details of immovable properties owned by him in Kolkata and elsewhere, which are free from any encumbrances, with copies of the supporting documents/title.

Judge Roy ordered that the company must declare that if the arbitral award is upheld, WBIDC will pay the entire amount awarded – both principal and interest, within eight weeks from the date the award becomes final.

The court ordered that if it is found that the security in the form of immovable properties is not sufficient to cover the entire awarded amount or any part thereof, WBIDC shall provide cash security within eight weeks to secure the said excess awarded amount.

The court ordered an unconditional stay of the grant for eight weeks, and thereafter, if the undertaking is not filed before the Registrar, Original Side, High Court, or the cash security is not deposited as the case may be within the eight week period, the stay will be automatically vacated.

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