This would enable Southern Petrochemical and Industries Corporation (Spic) to go ahead with its proposal to set up Spic Petrochemicals Ltd (Spic Petro), at an estimated cost of Rs 3,800 crore.

With this approval, CPCL and Spic would go for an out-of-court settlement of their case and the former may pull out of the Arochem project. Spic will have to compensate CPCL for its investments in the project.

Spic Petro, in which Spic has already invested Rs 1,000 crore, is to produce mainly three lakh tonne of purified terephthalic acid (PTA) and 80,000 tonnes of polyester filament yarn (PFY) a year.

According to Mr VR Aravind, managing director of Spic Petro, the company will explore several options, including taking in a joint venture partner, in promoting this project in due course.

But the first step, he told The Financial Express, would be to approach the Madras High Court for getting the injunction on Spic Petro lifted as the project is said to be approved by the Union Cabinet. (The Spic Group is awaiting official communication on this.)

Thus a long legal battle between the two corproate majors in Chennai, which had begun in the mid-ninties, is drawing to an end. The original plan was to float (Arochem) with Spic and MRL (now CPCL) as joint venture partners.

Because of delay in implementation of the project Spic pulled out and floated Spic Petro.

After much mud-slinging from both sides, including a CBI probe on alleged occupation of Arochem land by Spic, the two companies agreed to settle the issue and signed a memorandum of understanding (MoU).

This was to enable CPCL to pull out of the Arochem project and allow Spic to proceed further with its plans to produce petrochemicals on its own.