Cal HC refuses WBIDC's plea for unconditional stay of arbitration award to Tata Motors

The Calcutta High Court on Thursday refused to entertain the WBIDCs prayer for an unconditional stay of an arbitration award in favour of Tata Motors over a dispute regarding land allotted for setting up a car manufacturing unit in Singur.

The Calcutta High Court on Thursday refused to entertain the WBIDC's prayer for an unconditional stay of an arbitration award in favour of Tata Motors over a dispute regarding land allotted for setting up a car manufacturing unit in Singur. The court imposed several terms and conditions on award-debtor West Bengal Industrial Development Corporation Ltd (WBIDC) for imposing a stay on the arbitration award passed on October 30, 2023. Passing the judgment, Justice Aniruddha Roy noted that the disputes between WBIDC and Tata Motors arose with regard to allotment of land for setting up a car manufacturing unit at Singur in West Bengal's Hooghly district, for which land was provided by applicant WBIDC. Following a prolonged anti-land acquisition agitation led by the then opposition leader Mamata Banerjee, Tata Motors left Singur to set up the Nano car plant in Gujarat's Sanand in October 2008. An arbitration tribunal on October 30, 2023, made an award in favour of Tata Motors for an aggregate sum of Rs 765.78 crores along with interest at the rate of 11 per cent per annum. WBIDC challenged this award in the high court and prayed for an unconditional stay of its operation. The court noted that the award-debtor/applicant is a government company in which the state is a stakeholder. In the judgment, Justice Roy imposed certain terms and conditions on WBIDC for the stay of the award. He directed that after calculating the entire principal and interest amount under the award as on the date of judgment (May 7, 2026), WBIDC will furnish an undertaking by way of an affidavit within eight weeks, along with particulars of immovable properties owned by it in Kolkata and elsewhere, which are free from any encumbrances, with copies of the supportive title deeds/documents. Justice Roy directed that the undertaking must state that if the arbitral award is upheld, WBIDC will pay the entire awarded amount - both principal and interest, within eight weeks from the date the award becomes final. The court directed that in the event it is found that the security in the form of immovable properties is not sufficient to cover the entire awarded sum or any part thereof, WBIDC will furnish cash security to secure the said excess awarded amount within eight weeks. The court ordered an unconditional stay of the award 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 automatically be vacated.