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In a long-awaited resolution to a 15-year-old dispute, Tata Motors has been awarded compensation of Rs. 765.78 crores along with interest following the closure of Tata Nano plant near Singur in West Bengal.

The arbitration proceedings between Tata Motors and West Bengal Industrial Development Corporation Limited (WBIDC) have come to an end with a unanimous decision in favour of Tata.

The company will also receive an additional Rs. 1 crore to cover legal costs. This landmark decision, dated 30th October 2023, marks the end of an intense chapter in Tata Motors’ history.

Tata Motors initiated the construction of a facility in Singur back on 21st January, 2007. The project was estimated to cost around Rs. 1800 crores, with plans to create over 2000 direct jobs and generate around 10,000 indirect employment opportunities among vendors and service providers in the plant’s vicinity.

The vendor park associated with the plant was bustling, with 13 vendors constructing plant buildings and 17 others in various stages of construction. However, the project faced unforeseen challenges. A political agitation over land acquisition issues disrupted the project’s timeline, just as the plant was gearing up to produce its first car in October 2008. The plant and its ancillary ecosystem encountered violence, disruptions, property damage and threats to personnel.

Ratan Tata, the then Chairman of Tata Motors, expressed his frustration and even considered withdrawing the company’s plans from Singur. In response, several state governments, including Punjab, Andhra Pradesh, Maharashtra, Orissa and Gujarat, extended offers to provide alternative locations should Tata Motors decide to relocate from West Bengal.

Faced with no immediate resolution in Singur, Tata Motors made the difficult decision to cease operations on 3rd October, 2008. The company eventually shifted its operations to Gujarat.

The arbitration proceedings have finally concluded with a unanimous award in favour of Tata Motors. According to the award, Tata Motors is entitled to receive Rs. 765.78 crores from WBIDC, along with 11% interest per annum from 1st September, 2016, until the full amount is recovered.