The three-year legal dispute between the Tamil Nadu government and Japanese car maker Nissan Motor involving nearly ₹5,000 crore has come to an end through an out-of-court settlement.

“Yes, we have closed the dispute following a settlement. However, it is confidential as it involves third party information,” said a senior State government official when asked about the settlement.

However, sources said that Nissan is expected to receive a small portion of what it had claimed as settlement.

The Madras High Court Chief Justice Amreshwar Pratap Sahi and Justice Senthilkumar Ramamoorthy allowed the parties to withdraw the petitions.

Renault and Nissan consortium entered into an MoU with the Tamil Nadu government in February 2008 to establish a greenfield integrated automobile project and related facilities in Chennai. An original MoU was signed on February 26, 2007, wherein Mahindra and Mahindra (M&M), Renault and Nissan were entities and it was called as M&M consortium.

The plan was to establish at the Oragadam Industrial Park, near Chennai, a 4-lakh-vehicle a year automobile factory at an investment of ₹4,000 crore over a period of seven years. However, M&M withdrew from the consortium and a new MoU was signed a year later.

The tussle started in February 2017 when Nissan invoked the provisions of the 2011 Comprehensive Economic Partnership Agreement between India and Japan and initiated international arbitral proceedings after serving notice upon Prime Minister Narendra Modi in July 2016, and claimed unpaid incentives of nearly ₹5,000 crore from the State government.

In December 2017, TN approached the Madras High Court to restrain Nissan from proceeding with international arbitration claiming that the company was not entitled to the claim, which was “exaggerated and not genuine.”