Contempt case: Essar directors appear in HC

Suresh P. Iyengar | | Updated on: Apr 01, 2022

Gavel And Scales Of Justice On Desk In Law Office | Photo Credit: studiocasper

Refuse to provide asset details, next hearing posted for Tuesday

Six directors of Essar Services and Essar House appeared before the Bombay High Court on Friday in the contempt petition filed by ArcelorMittal Nippon Steel.

Taking note of the submission made by Birendra Saraf, Senior Advocate appearing for ArcelorMittal, Justices Madhav J Jamdar and GS Patel said the two companies and all their directors are saying that they will not, under any circumstances, comply with the orders of the court, whether for deposit or disclosure (of directors assets).

The court gave the directors and the companies the option of depositing 50 per cent (of outstanding payment). Instead, all that the court was told was that there will be neither a deposit nor a disclosure. This approach and attitude is reprehensible and should not be countenanced because it undermines the authority of the court and the rule of Law. It makes it acceptable for litigants who have lost throughout to treat orders of the court as irrelevant paper orders, the Court order said.

The next hearing in the case was posted for Tuesday.

When contacted an Essar spokesperson said “Matter is subjudice. We have approached the Supreme court and our appeal in the subject matter is pending hearing. Further the Bombay high court is aware that SLP has been filed challenging the orders for deposits.”

Court directive

The Bombay High Court on Thursday directed the directors of two of the Essar Group companies to personally be present in the court and directed them to furnish details on their movable and immovable properties and bank accounts.

The contempt petition of ArcelorMittal Nippon Steel alleged that the firms have failed to deposit collectively over ₹82 crore in an arbitration dispute over a refundable security deposit, despite a court direction.

ArcelorMittal Nippon Steel entered into agreement to avail managerial, accounting and administrative services from Essar Services and paid interest free deposit of ₹47.41 crore in January 2012. Similarly, it availed business centre facility on the sixth floor of Essar House by paying refundable security deposit of ₹35.52 crore.

In 2019, AMNS took over Essar Steel and terminated Essar Services agreement and sought refund of the security deposit. However, Essar refused to repay the deposit and AMNS filed an arbitration petition.

In December 2020, a single judge of the High Court directed Essar to deposit ₹82 crore or furnish bank guarantee of that amount with interest and appointed Soli Cooper as sole arbitrator.

In January 2021, Essar filed another arbitration petition seeking to dismiss the previous order directing to deposit the disputed money with the court. In February, the court dismissed the petition and asked Essar Services to deposit the money by March.

Meanwhile, Essar in February moved a Special Leave Petition before the Supreme Court seeking to dismiss the High Court order forcing AMNS to file a contempt petition with the High Court.

Published on April 01, 2022
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you