Calcutta HC Imposes Conditions On WBIDC In Singur Arbitration Dispute With Tata Motors

The Calcutta High Court on Thursday refused to grant an unconditional stay on the enforcement of an arbitration award in favour of Tata Motors in connection with the long-standing Singur land dispute, instead allowing a conditional stay subject to strict safeguards.

The case relates to land allotted for a proposed small car manufacturing unit at Singur in West Bengal’s Hooghly district, a project that was later abandoned in 2008 following prolonged protests against land acquisition. The dispute between Tata Motors and the West Bengal Industrial Development Corporation (WBIDC) subsequently went into arbitration.

An arbitration tribunal, by its award dated October 30, 2023, directed WBIDC to pay ₹765.78 crore along with interest at 11 per cent per annum to Tata Motors as compensation.

WBIDC challenged the award before the Calcutta High Court and sought an unconditional stay on its operation. However, Justice Aniruddha Roy declined the plea and granted only a temporary stay of eight weeks, subject to conditions.

The court noted that WBIDC is a government-controlled entity and directed it to file an affidavit within eight weeks, along with details of unencumbered immovable properties owned by it in Kolkata and elsewhere, supported by relevant documents.

The court further directed WBIDC to undertake that, if the arbitral award is ultimately upheld, it will pay the entire awarded amount, including principal and interest, within eight weeks from the date the award attains finality.

It also ordered that if the value of the security offered through immovable properties is found insufficient to cover the award amount, WBIDC must furnish additional cash security within the stipulated time.

The court made it clear that the interim stay will automatically stand vacated if WBIDC fails to comply with the conditions within eight weeks.

The order provides temporary relief to WBIDC while ensuring financial safeguards remain in place for enforcement of the arbitration award in favour of Tata Motors, pending final adjudication of the matter.