ArcelorMittal had taken over the bankrupt Essar Steel India.
Credit: Reuters Photo
New Delhi: The Supreme Court on Monday set aside the Delhi High Court's order that rejected a plea by the Indian Oil Corporation Ltd to appoint an arbitral tribunal to settle its Rs 8,772-crore claim against Lakshmi Mittal-led ArcelorMittal Nippon Steel.
The IOCL's claim was initially filed against bankrupt Essar Steel India, which was taken over by ArcelorMittal in December 2019 after it won approval from the Supreme Court.
A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra allowed appointment of arbitrator having noted that both the sides have decided to appoint their respective arbitrators and resolve the dispute through arbitration.
The HC had termed the disputes as “non-arbitrable” and had held that “no reference to arbitration tribunal (AT) is warranted.”
After briefly hearing senior advocates Harish Salve and A M Singhvi for ArcelorMittal and Solicitor General Tushar Mehta, the bench noted said the parties have agreed to nominate two arbitrators within a week.
“The two arbitrators so appointed will nominate the third arbitrator. In view of the agreement of the parties, the Delhi high court’s judgment dated October 10, 2023, is rendered infructuous,” the bench said.
The apex court said that all rights and contentions of the parties are kept open.
In 2019, ESIL was acquired by ArcelorMittal through the corporate insolvency resolution process.
The high court had dismissed IOCL’s plea to appoint an arbitrator to adjudicate a dispute that emanated from a gas supply agreement (GSA) that it entered with ESIL in 2009. The National Company Law Tribunal, in August 2017, in Ahmedabad admitted ESIL into insolvency proceedings and appointed a resolution professional.
A claim of over Rs 3500 was claimed by IOC before the RP. However, the claim was admitted for a notional value of Re one.
In 2019, the apex court approved ArcelorMittal’s resolution plan, which included this notional value. The resolution plan was implemented and ArcelorMittal took over the company. In 2022, IOC moved the Delhi High Court for the appointment of an arbitrator to adjudicate its dispute.