CHENNAI: The State government on Wednesday insisted that the Madras High Court should stall the international arbitration initiated by Japanese automaker Nissan over the issue relating to unpaid tax refunds to the tune of USD 770 million.
“We are aggrieved by the international arbitration and there is some urgency on our side. Hence, we are ready to proceed with the hearing of the case,” Advocate-General Vijay Narayan told Justice Anita Sumanth.
“What is the urgency when Tamil Nadu is not even a party to the arbitration. How is the application maintainable,” the judge asked. Vijay Narayan replied that the State government and Nissan have arbitration agreement between them and therefore, the application is maintainable.
However, Nissan’s senior counsel P S Raman requested the judge to post the hearing after summer vacation in June, as there is no urgency. “Even the next hearing of the arbitration proceeding is scheduled only on November 6,” he said.
Recording the submission, the judge posted the plea for April 5 to decide the maintainability of the application.
Nissan informed the High Court on March 16 last that the Tamil Nadu State has commenced talks with the company and sought the court to defer the hearing on the plea.
As no one represented the State then, the judge said she cannot take a decision on deferring the hearing without hearing the government and posted the plea for Wednesday. The Tamil Nadu government in December last year had moved the High Court to restrain Nissan from proceeding with its arbitration against India over unpaid tax refunds.
The State had alleged that Nissan had invoked the international arbitration contained under the Comprehensive Economic Partnership Agreement (CEPA) between India and Japan to “coerce Tamil Nadu government”.
However, the Union government filed an affidavit saying that the State government does not have locus standi to challenge the international arbitration proceedings initiated by the automaker against India.