Centre: TN cannot challenge Nissan’s international arbitration proceedings

The centre, moving a counter affidavit in response to the plea moved by Tamil Nadu seeking to stay the arbitration proceedings, made it clear that the jurisdiction of the international tribunal constituted under the Comprehensive Economic Partnership Agreement (CEPA) can be decided only by the tribunal itself. 

Additional Solicitor General G Rajagopalan, making submissions on behalf of the central government’s department of Heavy Industry, said, “The Tamil Nadu government is not even a party to the CEPA, or the claim made by Nissan under the CEPA. For this reason, Tamil Nadu does not have the locus to maintain an application praying that the international arbitration initiated by Nissan against India be injuncted.” 

Also, raising objection to the averment made by Tamil Nadu that the Union had entered into the CEPA with a view to coercing the state government in paying the alleged refunds, the centre said, “The union enters into treaties to strengthen international relations and further diplomacy on which the state governments cannot be consulted prior to the same.” 

However, the counter moved by the centre expressed hope that it would succeed in terminating the arbitration proceedings, by making jurisdictional submissions and causing Nissan to opt for domestic remedies pursuant to the MoU provisions.

Tamil Nadu in its plea had claimed that under the MoU signed on February 22, 2008, any dispute that cannot be resolved amicably through ordinary negotiations by the parties will be decided by arbitration under the Indian Arbitration and Conciliation Act, 1996 and the venue of the arbitration will be only in Chennai.