SC stays order asking VAL to deposit security

In a respite to Vedanta Aluminum Ltd (VAL), the Supreme Court on Tuesday stayed a Bombay High Court order that had directed the company to deposit a security amount of Rs 187 crore with the court till the disposal of its arbitration proceedings with Chinese power equipment manufacturer Shenzen Shandong Nuclear Power Construction Company (SSNPCC).

SNPCC had filed an arbitration plea to recover its dues against Vedanta while alleging it incurred huge losses because of VAL stopping work at its alumina refinery at Lanjigarh in Orissa. VAL had roped in SSNPCC in 2008 for setting up co-generation units on a turn-key basis for the Rs 1,200 crore project. However, the project got stuck for want of environmental clearances.

While issuing notices to SSNPCC, a Bench led by Justice AK Patnaik stayed the high court's direction and observed that the court, normally, did not secure amounts, which were yet to be adjudicated in appropriate proceedings.

VAL has challenged the HC's order of December 2012, that directed it to deposit the security of Rs 187 crore within six weeks and also restrained the company from transferring its assets for the same amount.

According to VAL, the order had no "cogent basis" as SSNPCC had no right to secure money and also since there was a serious dispute whether any money was payable. It added that SSNPCC had not completed the project as per schedule and the termination of contract by the Chinese firm was unjustified, which required it to compensate VAL.

ALSO READ

Kelkar panel on natural gas pricing likely to endorse Rangarajan formula

DGCA scrutiny likely for airlines' levy on services

After lull, highway projects see aggressive bid offers

PM: Govt initiating more measures to attract investments