Nissan settles dispute with Tamil Nadu government over unpaid dues of Rs 5000 crore: Report

The Japanese auto major was to receive between Rs 1400 crore (USD 185 million) and Rs 1800 crore (USD 238 million) as per the settlement, said the report.

Nissan Motors has agreed to settle a long-running dispute with the Tamil Nadu government after claiming it was owed Rs 5000 crore (USD 660 million) in unpaid dues and damages, according to a report by Reuters.

The Japanese auto major was to receive between Rs 1400 crore (USD 185 million) and Rs 1800 crore (USD 238 million) as per the settlement, said the report. The dispute began after the company said the state government owed the amount under a 2008 agreement for setting up a plant near Chennai.

The carmaker started an international negotiation against India in 2016, claiming Rs 2100 crore in unpaid dues and Rs 2900 crore in other costs. The state government had been trying to reach a resolution with the company for many years.

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Tamil Nadu industries minister MC Sampath said the state government had resolved the issue but refused to give further details, according to the report. "Nissan has begun the process to withdraw the international arbitration," he was quoted as saying.

The terms of the resolution were not clear and neither could they be independently verified, said the report.

The settlement comes as Nissan's declining profits have been exacerbated by the COVID-19 crisis. The company announced its first loss in 11 years on Thursday.

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The TN government believes the current payment won't affect the state's finances amid the coronavirus crisis. "The payment will be made from a separate fund of Rs 2500 crore rupees which is allocated for the auto sector," said Sampath.