Companies

London court rejects ArcelorMittal appeal against Essar

Suresh P Iyengar Mumbai | Updated on May 01, 2020 Published on May 01, 2020

The logo of steel factory ArcelorMittal   -  REUTERS

Allows ArcelorMittal to amend its present claim

The Court of Appeal in London has dismissed an appeal filed by Lakshmi Mittal-run ArcelorMittal USA, seeking permission to appeal against the London High Court’s judgment favouring the the parent company of Essar Steel and its promoter family.

The London High Court, on March 30, had dismissed ArcelorMittal’s plea for a worldwide freeze on the assets of Essar Steel, its promoters and family members following a dispute over an arbitration award that the global firm had obtained against Essar Steel Ltd, a Mauritius company and a subsidiary of Essar Global.

“The Court of Appeal’s decision given by Lord Justice Newey on April 21, 2020, concluded that Arcelor Mittal USA’s appeal had no real prospect of success and there was no other compelling reason for the Court of Appeal to hear it,” Essar said in a statement.

In his judgment, High Court Judge Andrew Henshaw had concluded that ArcelorMittal had not even made out a good arguable case as regards its underlying claims, the statement added.

‘No risk of dissipation’

Further, the judgment confirmed that there was no real risk of ‘dissipation’ by Essar Global or the individuals of their assets, and that Essar Global’s prior dealings with regard to certain assets within the Essar portfolio had not been undertaken by it with the objective of defeating ArcelorMittal’s claim against other Essar entities, said the company in its statement.

However, ArcelorMittal has indicated that it intends to amend its present claim and has been permitted a short period to do so by the Court. If pursued, it will be vigorously resisted by Essar and the other defendants, it added.

ArcelorMittal, along with its joint venture partner, took over Essar Steel assets in India after a long-drawn insolvency driven process.

“We have maintained that the judicial proceedings and the underlying claims of wrongdoing brought by ArcelorMittal lack basis in fact or reality. We are relieved that the threat of injunctions has been finally removed by the Court, and that the underlying claims by the company have been found to be less than arguable,” said an Essar spokesperson.

In 2019, Essar Steel entered into insolvency in Mauritius, but ArcelorMittal had objected to the insolvency process and launched proceedings against Essar entities.

ArcelorMittal’s latest proceedings in England was its third failed attempt to use foreign courts to circumvent the insolvency process in Mauritius. According to ArcelorMittal’s own evidence, it has incurred over $12 million in this legal battle.

Published on May 01, 2020
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