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The National Company Law Appellate Tribunal has stayed the National Company Law Tribunal-Ahmedabad order directing ArcelorMittal to pay ₹1,300 crore to Srei Infrastructure. The amount was claimed by Srei as charge for using slurry pipeline owned by its subsidiary Odisha Slurry Pipeline India (OSPIL) to keep the Essar Steel plant running during the insolvency period.
As an ad interim relief, the NCLAT said the impugned order of November 10 shall remain stayed till next date of hearing. The payment deadline was December 25.
The case has been posted for next hearing on January 22.
NCLT order ‘absurd’
Apart from other issues raised in this appeal, the order holding that the usage charges for the use of slurry pipeline for running the Corporate Debtor (Essar Steel) as going concern during the corporate insolvency resolution process period are insolvency resolution process costs and directing the ArcelorMittal to make the payment of IRP costs to OSPIL by December 15 is assailed as being absurd, said the NCLAT order.
Harish Salve, senior counsel, said that the ArcelorMittal has been directed to make payment of charges as IRP costs to an entity which had not claimed it during Essar Steel’s resolution process or even thereafter.
In the 322-page order, the NCLT Ahmedabad had noted that the resolution applicant (for Essar Steel) had contravened the provisions of the approved resolution plan by not making payment of such IRP costs that had been provided in the resolution plan and approved by the adjudicating authority.
The claim of additional cost by Srei had come 11 months after the joint acquisition of Essar Steel by ArcelorMittal and Nippon Steel in a ₹42,000- crore dealand the company was subsequently renamed as AM/NS India.
OSPIL owns and operates the 253-km slurry pipeline connecting AM/NS India’s iron ore beneficiation plant in Dabuna with its 12-million tonne pellet plant in Paradip. The pipeline was leased to Essar Steel and the arrangement with OSPIL was captured in the Right to Use Agreement.
OSPIL is owned 69 per cent by India Growth Opportunities Fund which is part of Srei Multiple Asset Investment Trust. The balance of OSPIL equity was held by Essar Steel.
Incidentally, OSPIL had defaulted on loan repayment and was dragged to NCLT. ArcelorMittal submitted a ₹2,359 crore resolution plan, which was approved by the Cuttack Bench of the NCLT earlier this year.
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