ArcelorMittal moves HC against Gujarat govt, Essar over Hazira port licence

ArcelorMittal Nippon Steel India Ltd (AMNSIL) has filed a petition in the Gujarat High Court against the Government of Gujarat and Essar Bulk Terminal Ltd seeking the transfer of Hazira port licence in its name.

Within days of acquiring Essar Steel under an insolvency process, AMNSIL had made an application to the Gujarat Maritime Board requesting that the licence be transferred to them.

While the government is yet to decide on the matter, the firm has approached the court stating that the Essar Bulk Terminal Ltd (EBTL) holds captive licence as a nominee or trustee, according to the petition filed under Article 226.

ArcelorMittal did not respond to email and phone calls made for comments.

Essar Steel owns a 10 million tonnes per annum steel plant at Hazira in Gujarat, which is serviced by a captive jetty constructed at port.

"The petitioner is seeking the reversion of the captive jetty licenses," AMNSIL said in its petition, claiming it was a captive user of the jetty and intended beneficiary under all the licences and expansions.

"EBTL is not an independent licensee... but merely a 'nominee' and 'trustee', holding the two licences on behalf of and in trust for petitioner's exclusive use and benefit," it said adding Essar Steel has ceased to be same group companies and therefore EBTL no longer stands eligible and does not possess any right as a license holder of the captive jetty.

Essar Bulk Terminal Limited has denied this stating that it is an independent company and there exists no nominee or trustee relationship between the companies.

In the Supreme Court approved resolution plan submitted by ArcelorMittal for Essar Steel under the Insolvency and Bankruptcy Code, ArcelorMittal had asked for directions to be given to the Gujarat Maritime Board and Essar Bulk Terminal Ltd asking them to continue the port services at Hazira on the same terms and conditions. What has changed since then is not clear.

When contacted, an Essar Ports executive said, "It is regrettable that ArcelorMittal and Nippon Steel would pursue such a frivolous and legally untenable claim. ArcelorMittal has been doing this habitually but what is surprising to us is that Nippon Steel is also supporting such an approach. Their claim is in violation of the signed agreements between the parties and is also in violation of the Supreme Court approved resolution plan submitted by them. Their sole objective appears to be to profiteer unlawfully. We are confident that the judicial authorities will see through their malafides and deal with the petition accordingly."

ArcelorMittal had earlier also opposed Essar Bulk Terminal Limited's decision to opt in under the new port policy of the Government of Gujarat.

As per sources, the Gujarat Government has currently put the implementation of the new port policy in abeyance due to ArcelorMittal representations.

Essar Bulk Terminal Ltd has also complained to the Government of Gujarat that ArcelorMittal and Nippon Steel are defaulting on payments of over Rs 450 crore which are owed to the port.

When asked, an Essar Ports executive confirmed that the Hazira port was not part of insolvency proceedings which was only for the steel plant.

Investment of the steel company in the port was only Rs 1.3 crore of the total investment of Rs 3,200 crore, the executive said.

According to the executive, 10 ports in Gujarat have opted in to the new port policy and not implementing the policy will cause the Gujarat government to lose potential revenue of more than Rs 2,000 crore from Essar Bulk Terminal Limited by way of additional wharfage and premium payments.