SC refuses relief to Chinese firm

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: May 11 2013, 05:36am hrs
In a setback to Chinese power equipment manufacturer Shenzen Shandong Nuclear Power Construction (SSNPCC), the Supreme Court on Friday refused to vacate its order that stayed the Bombay High Court judgment asking Vedanta Aluminum (VAL) to deposit a security amount of R187 crore with the court, till the disposal of arbitration proceedings with the multinational.

SSNPCC, which sought vacation of the stay, has filed an arbitration plea to recover its dues against Vedanta ,saying the firm has incurred tremendous losses due to work stoppage at the latters alumina refinery in Lanjigarh, Odisha.

A bench headed by Justice RM Lodha refused to vacate the stay granted by it, saying there is no question of modification of the order.

The Anil Agarwal-led VAL had roped in SSNPCC in 2008 for setting up co-generation units on a turn-key basis for the R1,200 crore project. However, the project is stuck due to lack of environmental clearance.

While alleging that VAL hid the fact that it did not have the approval, Shenzhen had cited a clause in the contract which empowered it to terminate the contract if the suspension of the agreement continued for over 180 days and at the end of it, after a thirty-day prior notice, Vedanta will pay 105% of the cost incurred by the contractor till the date of termination as compensation.

The Anil Agarwal company has challenged the HCs order of December 12 that directed it to deposit the security of R187 crore within 6 weeks and also restrained the company from transferring its assets for the same amount.

VAL argued that the HC had passed attachment proceedings before the arbitration claim was decided. The division bench of the HC went outside the purview and examined contract which is the job of the arbitrator.