By: Aswathy P
THE Court of Appeal in London has ordered that ArcelorMittal can’t appeal against a court order in favour of the parent company of Essar Steel Ltd and members of the promoter family.
The court on April 21 held that ‘no real prospect of success’ for the appeal and there was ‘no other compelling reason’ to hear it. ArcelorMittal sought permission to appeal against the London High Court’s judgment on March 30 that refused a worldwide freezing order against Essar Steel’s parent company and members of promoter family.
“The Court of Appeal’s decision given by Lord Justice Newey on April 21, 2020, concluded that Arcelor Mittal USA’s (AMUSA) appeal had no real prospect of success and there was no other compelling reason for the Court of Appeal to hear it,” Essar said in a statement.
The high court order of March 30 came as steelmaker ArcelorMittal looked to enforce a $1.5 billion arbitral award stemming from a soured supply agreement. In an 81-page judgment, High Court Judge Andrew Henshaw had found no merit in the case being brought by ArcelorMittal to enforce a worldwide freeze on Essar’s assets to protect them from “dissipation” while the former pursues parallel legal remedies.
“The (March 30) Judgment concluded that AMUSA had not even made out a good arguable case as regards its underlying claims. Further, the Judgment confirmed that there was no real risk of dissipation by Essar Global or the individuals of their assets and that Essar Global’s prior dealings with regard to certain assets within the Essar portfolio had not been undertaken by it with the objective of defeating AMUSA’s claim against other Essar entities,” the statement said.
The AMUSA had petitioned the court that the Essar Group which owed the former $1.5 billion in an earlier arbitration award had moved assets around in such a way as to take them out of the hands of the judgment creditors. AMUSA’s key argument that the Ruia family reclassified assets of Essar Steel in India so as to take them out of the balance sheet of the judgment debtor’s books did not find favour with the court.
“We have consistently maintained that the judicial proceedings and the underlying claims of wrongdoing brought by AMUSA were totally ill-conceived and lacking any basis in fact or reality. We are relieved that the threat of wide-ranging and ill-conceived injunctions has been finally removed by the Court and that the underlying claims by AMUSA have been found, at this early stage, to be less than arguable,” said Essar spokesperson.
The origins of the present dispute arise from an arbitration award that AMUSA obtained against Essar Steel Ltd, a Mauritius company, and a subsidiary of Essar Global. Essar Steel went into insolvency in Mauritius in 2019.
“AMUSA’s latest proceedings in England, are its third failed attempt to use foreign courts to circumvent the insolvency process in Mauritius,” the statement added.