French company Air Liquide seeks Ministerial help to resolve a 14-year-old pending issue with RINL

The Ambassador of France to India, Thierry Mathou, has written to Union Steel Minister, Jyotiraditya Scindia, seeking a resolution to a nearly 14-year-long dispute between the Indian arm of a French company working in the industrial gases sector, Air Liquide India Holdings, and CPSE, Rashtriya Ispat Nigam Ltd (RINL).

The dispute pertains to a 2010 supply contract that the CPSE had entered into with Air Liquide for the “supply of oxygen, nitrogen gases, and liquid primarily for captive consumption” of RINL.

Air Liquide, in a letter to the French Embassy (copy with businessline) in January, claimed it installed the cryogenic air separation unit to meet the need for industrial gases required for metal production through blast furnaces. However, commissioning was not carried out and failure to resolve differences stalled the commissioning. Since the contract was terminated in 2014, it was ultimately referred to arbitration tribunal.

The French company claimed that it continued to carry out directions given to it by the Tribunal which included having various performance tests, health checks “on all equipment”, refurbishing and replacing some. Covid and the delayed commissioning of the third blast furnace delayed operationalising the air separation unit.

Alternatively, Air Liquide has offered a “mutual settlement” proposal which, according to an official of the Steel Ministry, is yet to be accepted by the RINL board.

The settlement talks of takeover terms (of the unit by RINL) so as to enable revival of the third blast furnace.

In its letter to the Embassy, Air Liquide, said, the dispute “has significantly affected Air Liquide India Holdings’ financial health”. “This dispute has also strained Air Liquide proactiveness to invest (here),” it said.

The company said it invested close to €72.4 million (close to ₹700 crore) in the last 14 years.

The French Ambassador in his letter said a joint solution is being preferred and this will allow “for revival plan of RINL to be initiated as soon as possible with the starting of their third blast furnace”.

Subsequently, earlier this month, Air Liquide reached out to the Ministry proposing a meeting with senior management of the company (and ministry officials). The participants included CEO – Africa, Middle East and India Hub, MD of the India arm and a representative of the Embassy.

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