ArcelorMittal lodges Contempt Petition in Bombay High Court against Essar entities

ArcelorMittal LAW INSIDER

Ambika bhardwaj

Published On: January 11, 2022 at 16:30 IST

ArcelorMittal Nippon Steel India has lodged Contempt Pleas in the Bombay High Court against two Essar Group entities, Accusing that they failed to deposit more than Rs 82 crore in an arbitral proceeding dispute over a Returnable Security Deposit even after a Court Order.

The Case was brought against Essar Services India Pvt Ltd (ESIPL) and Essar House Pvt Ltd (EHPL), which were Ordered to deposit with the Court Rs 47.41 crore and Rs 35 crore as Security Deposits which they had obtained from Essar Steel, respectively.

ArcelorMittal of Luxembourg and Nippon Steel of Japan had bought Essar Steel out of Insolvency and changed its name to ArcelorMittal Nippon Steel India. Now it is attempting to recoup the Security Deposits that it asserts were returnable on such Termination of the Contract.

After their Lawyers told the Court that the two companies don’t have funds, a Division Bench of Justices SJ Kathawala and MN Jadhav asked both ESIPL and EHPL to reveal the current condition of all receivables and the stages in

ArcelorMittal filed an immediate Defensive Interim Order with the Court in November 2020, prior to the start of the Arbitral Proceedings.

Essar Steel had a Lease agreement with Essar Housing to take up a part of the Essar House in Central Mumbai’s Mahalakshmi area. Essar Steel relied on ESIPL for management, organisational, and accounting services.

The two Essar entities refused to cover the Security Deposit, claiming that they would have unilaterally novated their responsibility in the bilateral agreement, thereby releasing them from any promise to pay.

ArcelorMittal made the decision to invoke the Arbitration Clause and approach the Bombay High Court to safeguard the sum until the Arbitration Tribunal issued an award.

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