Thirteen-years after, the government-owned State Trading Corporation of India has recovered ₹2,210 crore from Pramod Mittal-owned Global Steel Holding and Global Steel Philippines Inc.
Pramod Mittal is the brother of ArcelorMittal promoter Lakshmi Mittal, who has successfully taken over the stressed Essar Steel asset with his ₹42,000-crore bid in the recent insolvency case proceedings.
Global Steel Holdings and Global Steel Philippines Inc was buying hot-rolled coil and cold-rolled coil from the STC since September 2003. Due to an unprecedented meltdown in the steel industry and depression in global economy it defaulted on payment to STC in 2005.
After a dispute arose over payments, the three parties — two Mittal companies and STC — worked out two settlement agreements under the Arbitration and Conciliation Act.
Pursuant to conciliation proceedings, STC had won an award of ₹1,605 crore, including principal and interest at 13.5 per cent per annum on USD benchmark rates. However, the two companies paid only part of the dues.
Following this, STC filed a case in the Delhi High Court against the companies and Pramod Mittal, as guarantor to recover the amount.
The matter then moved to the Supreme Court after the High Court dismissed STC’s plea in March 2015 saying it lacked jurisdiction to execute settlements between the two sides signed outside India.
Last December, Mittal had deposited ₹800 crore as payment of the principal amount. He was supposed to pay another ₹600 crore as interest within 12 weeks. Before this, he had paid another ₹810 crore to STC. Earlier this month, Pramod Mittal paid the remaining amount as full and final settlement of STC’s claim.
All the proceedings have been settled pursuant to orders dated December 6, 2018 and March 12 passed by the Supreme Court and proceedings, including various criminal cases, proceedings instituted against the companies, its promoter Pramod Mittal and Balasore Alloys by the Enforcement Directorate and FIR registered by the CBI, have been quashed, said a Supreme Court order.
Consequent to the settlement, STC also agreed not to file winding up proceedings against Global Steel Holding in the Isle of Man Court.