The Calcutta High Court on Thursday refused the West Bengal Industrial Development Corporation's (WBIDC) plea for an unconditional stay of an arbitration award favoring Tata Motors in the Singur land dispute. The court directed WBIDC to file an undertaking covering all its immovable properties to secure the awarded amount of Rs 766 crore, plus 11% interest per annum, which the corporation must pay as damages.
Court's Directive and Conditions
A single-judge bench of Justice Aniruddha Roy dismissed WBIDC's appeal for an unconditional stay, citing allegations of fraud against one of the arbitrators. The judge imposed a cost of Rs 50,000 on the corporation. However, a stay of eight weeks was granted to allow WBIDC to compile its affidavit and assets, with a crucial condition: if the undertaking is not filed before the registrar or the cash security is not deposited within this period, the stay will be automatically vacated.
Security Arrangements
The judge directed that if the immovable properties offered as security are insufficient to cover the awarded amount, WBIDC may furnish cash security to secure the excess. In October 2023, an arbitral tribunal had ordered WBIDC to pay Tata Motors Rs 766 crore compensation for losses incurred on its manufacturing site in Singur. The company had to relocate its Nano car plant from Singur to Sanand in Gujarat in October 2008 due to a land dispute, by which time Tata Motors had invested over Rs 1,000 crore in Singur.
Allegations of Bias
WBIDC moved the High Court citing seven instances where one arbitrator and his wife were allegedly closely associated with Tata Motors, raising concerns of bias. The court, however, did not find these grounds sufficient for an unconditional stay.
