Delhi High Court Rules In Favour Of ArcelorMittal Nippon In Indian Oil Dispute

The Delhi High Court dismissed Indian Oil Corp.'s petition against ArcelorMittal Nippon Steel India Ltd. on Wednesday.

Indian Oil Corp. had petitioned for the appointment of an arbitrator to settle its claims. The court decided that Indian Oil Corp.'s claims couldn't be resolved through arbitration, and hence, there wouldn't be any in the matter.

The bench, comprising Justice Yashwant Varma, said that since the resolution plan was approved, all of Indian Oil Corp.'s claims no longer apply. Therefore, raising this dispute again before the arbitral tribunal is not allowed.

In 2009, Indian Oil Corp. and ArcelorMittal Nippon Steel (formerly known as Essar Steel India Ltd.) signed a gas supply agreement. However, the agreement was terminated by ArcelorMittal Nippon Steel in 2017. Indian Oil Corp. disagreed with the termination and called for arbitration in July 2017. But in August 2017, ArcelorMittal Nippon Steel had to go through a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. This situation put everything on hold.

Later, Indian Oil Corp. went to the Delhi High Court, seeking the appointment of an arbitrator using Section 11 of the Act. However, the court rejected the petition.

In its decision, the court referred to a judgment made by the Supreme Court in NTPC Ltd. versus SPML Infra Ltd., stating that Indian Oil Corp.'s claims cannot be resolved through arbitration. The High Court also said that once it's understood that the Resolution Plan approval erases all of Indian Oil Corp.'s claims, the dispute that the oil company is now raising cannot be brought to an arbitral tribunal again.

Bringing the dispute before an arbitral tribunal would mean rewriting the terms under which ArcelorMittal took over Essar Steel, which is against the law, the court said. Referring these disputes to the arbitral tribunal would reopen the resolution plan, which goes against the Supreme Court's final decision.

So, based on careful examination, the high court said that the disputes in the Section 11 petition cannot be resolved through arbitration, and there's no need to involve the arbitral tribunal.