Vedanta gets SC stay in R187-cr security issue

In a verdict that will bring relief for Vedanta Aluminium (VAL), the Supreme Court on Tuesday stayed the Bombay High Court order that asked the Anil Agarwal firm to deposit a security amount of R187 crore with the court, till the disposal of arbitration proceedings with Chinese power equipment manufacturer Shenzen Shandong Nuclear Power Construction Company (SSNPCC).

SSNPCC had filed an arbitration plea to recover its dues against Vedanta, saying it has incurred 'tremendous losses' due to stoppage of work at the latter's alumina refinery in Lanjigarh, Orissa. VAL had roped in SSNPCC in 2008 for setting up co-generation units on a turn-key basis for the R1,200-crore project. However, the project is stuck due to lack of environmental clearance.

An apex court bench headed by Justice AK Patnaik, while issuing notice to ICICI Bank, stayed the HC's direction, saying that normally the court does not secure an amount that is yet to be adjudicated. It also noted the argument by senior counsel AM Singhvi that such order on deposit of security was passed in "unusual circumstances."

Singhvi submitted that "Vedanta is about to be bankrupt and is camouflaging the issue." He said that Vedanta's admitted liability towards secured and unsecured creditors is around R26,000 crore .

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