An arbitration tribunal has directed the Steel Authority of India to pay about $48 million (Rs 323 crore) to Essar Shipping for illegally terminating a contract and causing damages and losses to the Ruia-controlled company.
The panel headed by former Supreme Court Justice Deepak Kumar Verma passed the award in favour of Essar Shipping and directed state-owned SAIL to pay the money last week.
“The arbitration panel had granted claim of $38 million and interest, which stands at around $48 million,” said Hemant Kumar, group general counsel of the Essar Group. “This was a very complex, time-consuming and tedious arbitration but we are happy with the end result.” A SAIL spokesperson said the company is studying the award and will take appropriate action. The dispute was over a contract between Essar Shipping and SAIL signed in November 2007. SAIL engaged Essar Shipping to transport 3 million tonnes of coking coal – a steel-making ingredient – from Queensland, Australia, to Indian ports including Vizag, Paradeep, Kakinada and Haldia.