MMTC's 3 Delhi Properties Attached in Anglo Coal Case
Moneylife Digital Team 26 August 2021
The Minerals and Metals Trading Corporation (MMTC) Ltd, India's largest public sector trading body, says a court has ordered attachment of its three properties located in Delhi in the Anglo Coal case. Earlier, after failing to pay the decretal amount, MMTC had deposited original title deeds of 36 immoveable properties to secure interests of Anglo-American Metallurgical Coal Pty Ltd.
In a regulatory filing, MMTC, which is one of the two highest earners of foreign exchange for India, says, "...vide order dated 23 August 2021, the execution court attached three properties located in Delhi. MMTC is exploring further legal remedies available."
Earlier this month, the Supreme Court disposed a special leave petition (SLP) in favour of the Australian company. The bench of justice RF Nariman and justice KM Joseph had set aside a decision of the division bench of Delhi High Court, while restoring the majority award issued on 12 May 2014. The apex court also upheld the single judge’s judgement on 10 July 2015 while dismissing MMTC's application filed under Section 34 of the Arbitration Act.
The execution petition filed by Anglo Coal was revived on 23 December 2020, and accordingly vide the order dated 3 March 2021 the execution court directed MMTC to deposit Rs586 crore, the principal of the decretal amount within two months from the date of the order.
However, MMTC failed to deposit the money citing financial crisis. The decision on the review petition came on 29 July 2021. Accordingly, Anglo Coal, the decree holder filed execution petition for Rs1,047 crore and MMTC has filed for Rs902 crore as liability on account of principal and interest as on 31 July 2021.
In 2007, Anglo Coal and MMTC entered into a long-term agreement for supply of a certain quantity of freshly mined and washed coking coal to the Indian company for three delivery periods between 1 July 2004 to 30 June 2007. Both the companies agreed to extend the agreement for two more delivery periods. By consensus, Anglo Coal and MMTC decided to extend the fifth delivery period till 30 September 2009. It was agreed that Anglo Coal would supply 466,000 metric tonnes (MT) of coal to MMTC at $300 per MT for the fifth delivery period.
However, due to the global crisis of 2008, MMTC requested Anglo Coal to reduce the price of coal for quantities to be supplied during the fifth delivery period. While MMTC alleged that Anglo Coal failed to supply 454,034MT of coking coal, the Australian company contended that the Indian company failed to buy the coal in breach of their agreement.
The matter then reached arbitration. On 12 May 2014, a panel of four arbitrators sat in New Delhi and delivered their international arbitral award in favour of Anglo Coal. The majority award held that the Australian company was able to supply the contracted quantity of coal for the fifth delivery period, at the contractual price, and that it was MMTC, who was unwilling to lift the coal, owing to a slump in the market.
MMTC challenged the award under Section 34 of the Arbitration and Conciliation Act before the Delhi High Court. In its judgement on 10 July 2015, the single judge bench upheld the majority award issued by the arbitration panel.
In March last year, a division bench of Delhi HC set aside the single judge order and allowed MMTC's appeal.
Later, the Supreme Court set aside the Delhi HC judgement dismissing the application made under Section 34 of the Arbitration Act by MMTC.
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