NCLAT stays NCLT order directing ArcelorMittal India to pay Rs 1,300 cr as IRP cost

By: |
December 7, 2020 3:44 PM

Passing an interim order, a two-member bench comprising Acting Chairperson Justice B L Bhat has stayed the order passed by the National Company Law Tribunal (NCLT) over the plea filed by ArcelorMittal India.

NCLT had on November 10, had held that the usage charges for the use of slurry pipeline for running the OSPIL as going concern during the Corporate Insolvency Resolution Process period are IRP costs. (File Image)

The National Company Law Appellate Tribunal (NCLAT) has stayed the orders of Ahmedabad bench of NCLT directing ArcelorMittal India to pay around Rs 1,300 crore as IRP costs in Odisha Slurry Pipeline Infrastructure (OSPIL) for using its assets. Passing an interim order, a two-member bench comprising Acting Chairperson Justice B L Bhat has stayed the order passed by the National Company Law Tribunal (NCLT) over the plea filed by ArcelorMittal India.

“As an ad-interim the operation of the impugned order as regards making of payment by the Appellant to “OSPIL’ by 15th December 2020 shall remain stayed till next date of hearing,” said NCLAT in its order passed on December 4. The appellate tribunal has directed to list the matter on January 22, 2021 for admissions and issued notices. Earlier, NCLT had on November 10, had held that the usage charges for the use of slurry pipeline for running the OSPIL as going concern during the Corporate Insolvency Resolution Process period are IRP costs.

It had directed to make the payment of IRP costs, around Rs 1,300 crore, to OSPIL by December 15, 2020, which was challenged before the NCLAT by ArcelorMittal India. ArcelorMittal India submitted that it has been directed to make payment of usage charges as IRP costs to an entity which had not claimed it during the Corporate Insolvency Resolution Process of Essar Steel India or even thereafter’.

OSPIL owns and operates a 253-km pipeline that connects iron ore mines in Dabuna, Odisha, to a pelletisation plant in Paradip and is vital for Essar Steel, which was jointly acquired by ArcelorMittal and Nippon Steel Corporation in a corporate insolvency resolution period. It was later renamed as ArcelorMittal Nippon Steel India (AMNS India).

NCLT Ahmedabad direction to pay had come based on a plea moved by SREI Infrastructure Finance Ltd, a financial creditor of OSPIL. OSPIL had also gone through an insolvency resolution process and earlier in March this year, the Cuttack bench of NCLT had approved a Rs 2,359-crore bid of ArcelorMittal India

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