Why is Nissan suing India for 5,000 crores including interest and damages,

now around the 17th int'l co with a claim against India - why don't we honour

our commitments ??

Why Nissan is suing India for Rs

5,000 crore
Sushmita Choudhury New Delhi Last Updated: December 1, 2017 | 15:37 IST

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What's common between Vodafone, Cairn Energy and Nissan, apart from
the fact that they are all foreign companies? The answer is that all three
companies are among several others that have initiated international
arbitration against India.
In fact, according to a recent report by Herbert Smith Freehills, a leading
international law firm, "The current number of bilateral investment treaties
(BIT) claims against India is understood to be around 17". The pending
cases range from issues related to retrospective taxation to payments
disputes.
The latest news is that Japanese automaker Nissan Motor has begun
international arbitration against the country seeking dues of more than
$770 million, for alleged violations of its Comprehensive Economic
Partnership Agreement with Japan, according to a Reuters report. In July
last year, Nissan had sent a legal notice to Prime Minister Narendra Modi
on this matter.
Back in 2008, when Nissan and its global alliance partner, French
carmaker Renault, agreed to invest in setting up a car plant in Chennai, the
state government promised several incentives including some tax refunds.
Over the next seven years, the company invested Rs 61 billion to set up a
plant with annual production capacity of 480,000 vehicles, which entitled
them to receive the incentives in 2015, according to the legal notice.
Nissan's lawyers also mentioned the state government's decision to not pay
was "arbitrary", and Nissan has "incurred significant and increasing losses".
Though the company did not specify the business impact in the 8-page
notice, in 2008, it had said that the state incentives were critical to the
project's viability and sustainability.
So the carmaker, in its notice, was claiming Rs2,900 crore in unpaid
incentives and Rs 2,100 crore in damages, plus interest and other costs. It
added that repeated requests to state officials for the payment, due in 2015,
were overlooked and even a plea by the company's chairman, Carlos Ghosn,
to Mr. Modi in March of last year seeking federal assistance did not yield
any results.
According to the Reuters' source, who is familiar with the matter, the
matter failed to progress towards resolution despite several follow up
meetings between federal and state officials and Nissan executives. Hence,
in August, Nissan gave India an ultimatum to appoint an arbitrator and the
first arbitration hearing will reportedly be in mid-December.
A senior Tamil Nadu state official admitted to Reuters that there is "no
discrepancy with regard to the amount due", and added that the
government hoped to resolve the dispute without having to go to
international arbitration. The Nissan spokesperson quoted in the report,
however, chose not to elaborate on the matter, simply stating that the
company was "committed to working with the government of India toward
a resolution".
Meanwhile, earlier this month, Vodafone Plc announced that an
international arbitration tribunal will begin trial on Vodafone's challenge to
India using a retrospective legislation to seek Rs 22,100 crore in taxes in
February 2018.
These disputes not only underline the various challenges that foreign
companies face in India but could also undermine the Indian Government’s
efforts to attract foreign investment. Similar stories abound in many other
country markets the world over – international companies at loggerheads
with the government of the land !

Questions for discussion –

1. Research to find two international (foreign) companies/ brands that have issues with
Indian regulatory authorities, or suppliers or competitors or collaborators. Make a one page
summary of the dispute on each of the three companies researched , with sub-heads –
Background & Summary, Major Issues, Status of dispute , What I learnt / what I would
recommend to the international /foreign company .
2. Briefly (not more than a page) discuss major difficulties foreign companies face in ANY
foreign markets (as they operate in host country environment).

This is an individual assignment – please do NOT collaborate / do NOT share with any other. You
can draw upon any meeting you may have had with an international marketing professional &
his/ her views to buttress your response.

Due date 22rd May, 2018 Title : Assignment # 2 –

Three International (foreign owned & controlled) Companies (disputes & possible resolution)