Indian Oil Corp (IOC) to nominate an arbitrator each within a week to resolve their dispute involving Essar Steel. The apex court also set aside the October ruling of the Delhi high court which had rejected IOC's plea for the appointment of an arbitral tribunal to settle its claims. According to the top court's directive, the nominated arbitrators will need to appoint a third arbitrator to complete the formation of the arbitral tribunal.
On Friday, AMNS and IOC informed the apex court that they had mutually agreed to appoint arbitrators to settle all disputes. The two parties had also urged the court to set aside the Delhi high court's ruling in the case. The dispute traces back to a conflict over a gas supply agreement (GSA) in 2009 between IOC and the then Essar Steel India (ESIL), which AMNS acquired after a corporate insolvency resolution process in 2019.
IOC had challenged the termination of the agreement by Essar Steel in 2017, demanding dues, which led to an arbitration invocation when Essar failed to respond. On 2 August 2017, the National Company Law Tribunal (NCLT) in Ahmedabad admitted ESIL into insolvency proceedings based on pleas by State Bank of India and Standard Chartered. IOC lodged a claim of over ₹3,500 crore with the appointed resolution professional (RP), but the RP only admitted the claim for a notional value of ₹1.
The Committee of Creditors (CoC) of Essar Steel accepted Arcelor Mittal's resolution plan, which was approved by the NCLT on March 8, 2019. The legal dispute escalated when the NCLT disagreed with the RP's decision regarding the admission of claims, including IOC's, at a nominal value of ₹1. Appeals were made in the National Company Law Appellate Tribunal (NCLAT), but similar decisions. Read more on livemint.com