Supreme Court Upholds Arbitral Award in Essex vs West Bengal Case

The Supreme Court has rejected West Bengal government's appeal against an arbitral award mandating payment of tax incentives to Essex Development Investments. Essex, having bought shares in Haldia Petrochemicals, expected incentives as per a share purchase agreement. The court advised settlement, citing citizens' trust and legitimate expectations.

The Supreme Court has ruled against the appeal of the West Bengal government challenging an arbitral award that compels the state to compensate the Mauritius-based Essex Development Investments with promised tax incentives.

Headed by Chief Justice Sanjiv Khanna, the bench agreed with the Calcutta High Court's decision mandating the state pay approximately Rs 2,063 crore to the investor. Essex had acquired shares in Haldia Petrochemicals under an agreement guaranteeing tax incentives.

The court emphasized the principle of legitimate expectations for Essex, urging the state to settle the matter amicably. Essex is part of The Chatterjee Group, which had invested to rejuvenate Haldia Petrochemicals. The dispute arose due to halted payments after the GST implementation despite prior agreements.

(With inputs from agencies.)