The Supreme Court has dismissed a petition filed by ArcelorMittal Nippon Steel India (AM/NS) and directed it to approach the Surat Court for redressal of its dispute with Essar Bulk Terminal over cargo handling and non-payment.

Earlier, the Surat Court order rejected AM/NS’ request to transfer proceedings to an arbitration tribunal constituted by the Gujarat High Court.

The Gujarat High Court on August 18 rejected a petition filed by AM/NS against this order. Following this, the steel giant moved the Supreme Court against the Gujarat High Court order.

The Division Bench of Justices Indira Banerjee and JK Maheswari on Tuesday held that the trial court can consider the Section 9 Arbitration Act application filed by Essar against AM/NS.

Dispute in agreement

Both AM/NS and Essar entered into an agreement for cargo handling at Hazira port in 2011. Last November, AM/NS called for arbitration process due to a dispute in the agreement.

WhenEssar did not respond to the arbitration notice, AM/NS moved the Gujarat High Court. However, last December, Essar replied to the notice, claiming dues of ₹674 crore inclusive of interest worth ₹51 crore.

In January, both companies moved a district and sessions court in Surat. In July, the Gujarat High Court appointed a three-member arbitration tribunal comprising three retired judges.

Following this, AM/NS moved a commercial court in Surat to shift the hearing to the arbitration tribunal. However, the Surat Court rejected the application on July 17.

In August, the High Court rejected AM/NS’ petition and held that the Surat Court has the power to pronounce its judgment before moving the case to the tribunal. Following this, AM/NS moved the Supreme Court which has directed the company to resolve the dispute with the arbitration tribunal after an order passed by the Surat Court.

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