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|7th December 2017, 00:33||#46|
Join Date: Apr 2011
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Re: Nissan sues India over outstanding dues
You're right on many accounts but just a question.
If I put up a power-plant for 4000 crores and after 6-7 years of building it - the government cancels a fuel linkage due to scams other people committed - or just because everyone was indulging in something wrong and the entrepreneur is cornered - does that make it my fault ? Now I'm stuck with a leveraged dead asset (non cash flow producing) that's hurting my cash flow for no fault of my own.
In India today billions of dollars are sitting dead in investment due to all kinds of conflicts of interest. A handful of industrialists have got snared in other people's games.
Azim Premji was once asked why he was so successful and his short answer was blunt and pithy. He said his business didn't involve the Indian government. Everyone knows how POSCO and ArcelorMittal was given grand promises in Orissa - both left as nothing materialized.
Last edited by D33-PAC : 7th December 2017 at 00:36.
|7th December 2017, 09:12||#47|
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Re: Nissan sues India over outstanding dues
Thank you for the points you make. Allow me to clarify. As this is a thread on a specific case of Nissan vs GoTN on a specific disagreement of incentives and we do not have all the facts on the table nor have we heard the other side of the story all I am saying is we should reserve our judgement till we have more facts on the table and not conclude GoTN is guilty on the basis of a well crafted press release by the plaintiff. Our angst against the Govt, often justified, should not lead us to assume guilt in this specific dispute. Lets wait and see what emerges on corporate and tax structures Nissan set up in India and offshore just north of the Indian entities to extract more concessions than the spirit of the contract intended. That to my limited knowledge is a common practice by large corporations.
My argument should not lead any one to conclude that on other projects, including the ones you refer, the Governments in India have a fair & reliable record. I agree with you on POSCO, Mittal but each case is unique and we may want to wait to know more of the other side on Nissan vs GoTN.
Our angst against GoI is justified for what they have done in the past with some high profile projects including some which got held up by the green tribunals. But that angst does not automatically mean that in this particular case Nissan is all in the right and GoTN is all in the wrong.
Like some others on TBHP I have spent many years and several pairs of Bata shoes dealing with the Govt. Some incidents have been loss making and sorrowful. My years of dealing with the Govt (in my field of business) on contracts, white papers, reforms, disputes and payments never made indicates only one thing that the Govt in a country as large and diverse as India is not one monolithic organization. Each department, each ministry, each state and each PSU is unique and functions at its own coefficient of effectiveness & fairness when dealing with the private sector.
I hope this clarifies. Best regards -Narayan
Last edited by V.Narayan : 7th December 2017 at 09:14.
|7th December 2017, 14:29||#48|
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Tamilnadu government calls Nissan claims not genuine;Moves High Court
The Government of Tamilnadu (TN) is taking on Japanese automaker Nissan, which took the Government of India to the International Arbitration Court. The TN government has moved the Madras High Court, seeking to restrain Nissan from proceeding with international arbitration against the Indian government. According to the TN government, the claims made by Nissan are 'exaggerated' and 'not genuine'.
￼The TN government also contends that under the Indo-Japanese Comprehensive Economic Partnership Agreement (CEPA), Nissan cannot initiate arbitration proceedings as there is a case already pending in this matter between the TN Government and Nissan in the Madras High Court. The government is also saying that it didn't sign the CEPA, and that the remedy to this issue instead lies in the the MoU that was signed between it and Nissan.
Last year, Renault-Nissan CEO Carlos Ghosn had written to Prime Minister Narendra Modi, seeking his intervention in the tax dispute between his company and the TN government. Modi didn't respond to the letter, following which Nissan decided to take the government of India to the arbitration court over the non-refund of taxes. Nissan is claiming US $ 770 million (nearly Rs. 5,000 crore) from the government.
The TN government, though its legal advisors, has made the following allegations against Nissan to the Madras High Court,
By changing the business model, the consortium was making an unlawful gain and reached the target (of incentives to be paid by government) within a short span of time and with undue benefits, which were all against the state's interests. If at all the two companies are aggrieved…the remedy is to invoke clause 15 of the MoU and not CEPA…there are no obligations cast on the applicant (Tamil Nadu), under the agreement. The companies, with a view to coercing the applicant (Tamil Nadu), are taking all sorts of pressurising tactics by invoking the arbitration clause in CEPA to which the applicant is not a party.
Last edited by SILVERWOOD : 7th December 2017 at 14:32.
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