Delhi HC seeks Gail’s response on ArcelorMittal’s plea for LNG supply
ArcelorMittal Nippon Steel India on Thursday moved the Delhi High Court seeking a stay on GAIL (India) Ltd's notice to terminate a 2022 agreement for supply of liquefied natural gas (LNG) for its steel plant in Hazira, Gujarat.
The steel manufacturer wants a direction to GAIL to continue supply of LNG, particularly in November, till the arbitration tribunal decided the dispute between them. It has also asked the high court to restrain the central public sector undertaking from taking any coercive action, including exhausting and alienating the LNG quantity which allegedly the state-owned firm is duty-bound to supply to it.
Justice Neena Bansal Krishna after hearing the arguments for the interim stay asked GAIL to respond to the ArceorMittal’s petition by Monday.
It posted the matter for further hearing on Wednesday.
Gail has abused “its position as a governmental entity, has failed to act in a just and fair manner and provide any sound and reasonable justification for its purported termination,” counsel Nitesh Jain and Rajat Jariwal said in their petition filed on behalf of ArcelorMittal.
ArcelorMittal and GAIL had in June 2022 executed an agreement for the sale and purchase of liquefied natural gas, wherein the PSU was obligated to sell and deliver liquefied natural gas on a take or pay basis during 2021 – 2025. The agreement provided for an Annual Contracted Quantity (ACQ) of LNG, i.e., 11.87 TBtu, to be delivered during each contract year.
However, disputes between the two arose due to Gail’s failure to supply LNG purportedly on account of an alleged Force Majeure event in August-December 2022, ArcelorMittal said in its petition.
While the steel company had initiated arbitration, GAIL in furtherance of “its
