Bhilwara moves European Court over dumping duty

In the first case of its kind, the LNJ Bhilwara group yesterday moved the European Court of Justice, Luxembourg, claiming that the 7 per cent anti-dumping duty imposed on its export of graphite electrodes to the European Union (EU) was discriminatory.

LNJ Bhilwara Group chairman Ravi Jhunjhunwala said: "There were no investigations carried out against exports from Russia and Japan, though these countries were exporting at the same, if not better, prices than us. We have been discriminated against."

The EU had imposed a provisional duty of 12.8 per cent on HEG Ltd, the LNJ Bhilwara Group flagship, in May this year following complaints of dumping against the company during 2002-03.

After the LNJ Bhilwara Group appealed against it, the EU came up with a final duty of 7 per cent in August this year.

At that time, the company was given the option of either paying the additional levy of seven per cent or raising its prices from the 2002-03 level by an equivalent amount. HEG had settled for the second option as prices had already increased by 10-12 per cent from the 2002-03 levels.

Though Jhunjhunwala said that the 7 per cent duty had not hampered exports to the European Union, the company has now moved court against it.

If the European Court of Justice upholds the pela that HEG Ltd was discriminated against, the anti-dumping duty will be totally removed. "Even if the case is decided against us, the seven per cent duty cannot be increased," Jhunjhunwala added.

There could be another reason for the LNJ Bhilwara Group seeking a removal of the anti-dumping duty: with its production capacity being doubled, the company is looking at exports of 25-30 million Euros to the European Union.

If the courts uphold the LNJ Bhilwara group's plea and remove the anti-dumping duty, HEG Ltd could save 2.5-3 million Euros per annum. Apart from discrimination, the LNJ Bhilwara Group has also mentioned in its appeal that the way subsidies have been calculated by the European Union to arrive at the seven per cent duty is not compatible with the WTO norms.