AgenciesArcelorMittal Nippon Steel India Ltd has filed contempt petitions against two Essar Group entities in the Bombay High Court alleging that companies failed to deposit collectively over Rs 82 crore as a security deposit in an arbitration dispute despite the court order.
The case has been filed against Essar Services India Pvt Ltd (ESIPL) and Essar House Pvt Ltd (EHPL), where both the Essar Group companies had received Rs 47.41 crore and Rs 35 crore security deposit from Essar Steel.
ArcelorMittal is seeking a refundable security deposit that the erstwhile Essar Steel had paid to these two companies and were payable upon termination of the contract with these companies.
On Monday, a division bench of Justice SJ Kathawala and Justice MN Jadhav directed ESIPL and EHCL to disclose the current status of all receivables and what steps companies are taking to recover the same.
Originally, in November 2020, ArcelorMittal (formerly Essar Steel) had approached the court for urgent protective interim orders before the commencement of the arbitration process under Section 17 of the Arbitration and Conciliation Act 1996.
According to two separate pleas, Essar Steel had entered into a rental agreement with Essar Housing. This was to occupy a certain portion of the Essar House, situated at Mahalakshmi area in Central Mumbai. While ESIPL was providing management, administrative and accounting services to Essar Steel.
Both the Essar entities, EHPL and ESIPL refused to refund the same money back on the ground that they had unilaterally novated their obligation in the bilateral agreement which subsequently set-off their liability to make any repayment.
Since there was a clause of arbitration with both the parties, ArcelorMittal decided to invoke the clause and approach the Bombay High Court to secure the amount until the arbitration tribunal gives an award.
In December 2020, the court had directed two Essar Group companies to deposit Rs 82 crore within eight weeks in the court. However, the order was challenged by the Essar entities in the division bench and the Supreme Court.
“As on date, there is no order of the Supreme Court staying of the operation of the appeal order. Accordingly, the SLP’s (special leave petition) pendency is no ground to violate the direction passed in the appeal order,” Argued ArcelorMittal Nippon its petition against EHPL.
ArcelorMittal Nippon Steel spokesperson declined to comment since the matter is subjudice. While email queries to Essar Group companies remained unanswered till the time of filing the story.
Senior counsel Birendra Saraf, along with law firm Shardul Amarchand Mangaldas & Co, represented Arcelor Mittal Nippon Steel.
The case has been filed against Essar Services India Pvt Ltd (ESIPL) and Essar House Pvt Ltd (EHPL), where both the Essar Group companies had received Rs 47.41 crore and Rs 35 crore security deposit from Essar Steel.
ArcelorMittal is seeking a refundable security deposit that the erstwhile Essar Steel had paid to these two companies and were payable upon termination of the contract with these companies.
On Monday, a division bench of Justice SJ Kathawala and Justice MN Jadhav directed ESIPL and EHCL to disclose the current status of all receivables and what steps companies are taking to recover the same.
Originally, in November 2020, ArcelorMittal (formerly Essar Steel) had approached the court for urgent protective interim orders before the commencement of the arbitration process under Section 17 of the Arbitration and Conciliation Act 1996.
According to two separate pleas, Essar Steel had entered into a rental agreement with Essar Housing. This was to occupy a certain portion of the Essar House, situated at Mahalakshmi area in Central Mumbai. While ESIPL was providing management, administrative and accounting services to Essar Steel.
Both the Essar entities, EHPL and ESIPL refused to refund the same money back on the ground that they had unilaterally novated their obligation in the bilateral agreement which subsequently set-off their liability to make any repayment.
Since there was a clause of arbitration with both the parties, ArcelorMittal decided to invoke the clause and approach the Bombay High Court to secure the amount until the arbitration tribunal gives an award.
In December 2020, the court had directed two Essar Group companies to deposit Rs 82 crore within eight weeks in the court. However, the order was challenged by the Essar entities in the division bench and the Supreme Court.
“As on date, there is no order of the Supreme Court staying of the operation of the appeal order. Accordingly, the SLP’s (special leave petition) pendency is no ground to violate the direction passed in the appeal order,” Argued ArcelorMittal Nippon its petition against EHPL.
ArcelorMittal Nippon Steel spokesperson declined to comment since the matter is subjudice. While email queries to Essar Group companies remained unanswered till the time of filing the story.
Senior counsel Birendra Saraf, along with law firm Shardul Amarchand Mangaldas & Co, represented Arcelor Mittal Nippon Steel.
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