SC to decide on IOC-Arcelor Mittal Nippon Steel case next weekMutual FundSC to decide on IOC-Arcelor Mittal Nippon Steel case next week

SC to decide on IOC-Arcelor Mittal Nippon Steel case next week


New Delhi: The Supreme Court will next week decide on a plea by Indian Oil Corp (IOC) against Arcelor Mittal Nippon Steel Limited (AMNS) concerning the appointment of an arbitral tribunal to settle its claims against the steel maker.

The three-judge bench, led by Chief Justice D.Y Chandrachud, while reserving its judgment on Monday, instructed the parties to submit their written responses by 9 February. 

The dispute traces back to a conflict over a gas supply agreement (GSA) from 2009 between IOC and the then Essar Steel India (ESIL), which AMNS acquired after a corporate insolvency resolution process approved by the Supreme Court in 2019. IOC had challenged the termination of the agreement by Essar Steel in 2017, demanding dues which led to an arbitration invocation when Essar failed to respond.

On 2 August, 2017, the National Company Law Tribunal (NCLT) in Ahmedabad admitted ESIL into insolvency proceedings based on pleas by State Bank of India and Standard Chartered. IOC lodged a claim of over 3,500 crore with the appointed resolution professional (RP), but the RP only admitted the claim for a notional value of 1. The Committee of Creditors (CoC) of Essar Steel accepted Arcelor Mittal’s resolution plan, which was approved by the NCLT on March 8, 2019.

The legal dispute escalated when the NCLT disagreed with the RP’s decision regarding the admission of claims, including IOC’s, at a nominal value of 1. Appeals were made in the National Company Law Appellate Tribunal (NCLAT), but similar decisions were reached. Eventually, the Supreme Court overturned the rulings of the NCLT and NCLAT, allowing the RP’s actions and approving AMNS’ resolution plan. ArcelorMittal acquired 100% of Essar Steel India’s shares on 16 December, 2019.

After the resolution plan was implemented, IOC sought payment as per the terms of the GSA. ArcelorMittal denied IOC’s claim, leading the oil company to invoke arbitration by serving notice to ArcelorMittal to appoint an arbitrator. However, AMNS remained unresponsive, prompting IOC to approach the Delhi High Court.

In October 2023, the Delhi High Court dismissed IOC’s plea because once the resolution process has been completed and the resolution plan approved, no fresh claims can be laid against the successful resolution applicant. The court ruled that the dispute sought in the current case could not be reintroduced before the arbitral tribunal, as it had already acknowledged the acceptance of the resolution plan as final. Allowing the petition would effectively imply a reopening of the resolution plan, making the issues raised by IOCL unsuitable for arbitration.

Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!

Catch all the Corporate news and Updates on Finplay. Check all the latest action on Budget 2024 here.
Download Finplay News App to get Daily Market Updates & Live Business News.

More
Less

Published: 05 Feb 2024, 05:20 PM IST

Disclaimer: Along with publishing our own news, we get news from various sources namely from news wires ANI, PTI, other reputed finance portals and individual journalists. We are not legally liable for any inaccuracies in the news and expect the reader to do their own due diligence.

http://ganesh@finplay.in

Finance enthusiast, Mutual fund expert.




Leave a Reply

Your email address will not be published. Required fields are marked *

Finplay

AMFI-registered Mutual Fund Distributor ARN-192179

Company

© 2024 Finplay Technologies Private Limited. All Rights Reserved.