Domestic conglomerate Essar's latest US possession, Esmark, is caught in a legal tangle with global steel giant ArcelorMittal, which is seeking over Rs 2,000 crore in damages for defaulting on a billion-dollar deal.
Esmark finds itself in a precarious condition as it cannot settle any claim over $0.5 million (around Rs 2 crore) without Essar Steel's consent as per terms of merger with the Ruias-promoted firm. Besides, the Indian entity can seek up to $22.5 million (around Rs 90 crore) from the US company in case the deal falls apart.
ArcelorMittal has filed a suit against Esmark in the Supreme Court of the State of New York for the latter's breach of contract in buying its Sparrows Point steel mill at a consideration of $1.35 billion.
The world's largest steel maker ArcelorMittal, run by the world's richest Indian Lakshmi Mittal, later sold Sparrows Point facility to Russian steel giant OAO Severstal on May 7 for $810 million.
Luxembourg-based ArcelorMittal is seeking damages in excess of $540 million
