New Delhi: ArcelorMittal India has to pay CIRP (Corporate Insolvency Resolution Process) cost of Rs 13 crore to Odisha Slurry Pipeline Infrastructure Limited (OSPIL) by December 31, 2020
The order was passed by a two-member bench of MB Gosavi, Member (Judicial) and VK Gupta, Member (Technical) National Company Law Tribunal (NCLT), Ahmedabad Bench, Bar and Bench reported.
The direction was given following an application moved by Srei Infrastructure Finance Limited, a financial creditor of Odisha Slurry Pipeline Infrastructure Ltd.
In its application under Section 33(3) and 33(4) read with Section 60(5) IBC, Srei contended that ArcelorMittal contravened the Resolution Plan for Essar Steel when it failed to pay the “Right to Use Charges” to the OSPIL for its pipeline asset.
These usage charges were hypothecated to Srei by OSPIL.
After analysing the relevant documents and the material on record, the NCLT held that the usage charges for the use of the slurry pipeline for running Essar Steel as a going concern constituted as CIRP costs. The NCLT noted that the CIRP costs were duly considered and provided for in the Resolution Plan by ArcelorMittal.
However, ArcelorMittal contravened the provisions of the approved Resolution Plan by not making payment of the CIRP costs, the report added.
According to NCLT, since OSPIL had hypothecated the charges to Srei, any payment of CIRP costs was going to directly benefit it, the report said.