KOLKATA: Haldia Petrochemicals (HPL) has challenged in Calcutta High Court the arbitration process initiated abroad by its private promoter The Chatterjee Group.
The company has filed a suit today seeking injunction on the arbitration case Purnendu Chatterjee is now pursuing at The International Court of Arbitration under the International Chamber of Commerce in Paris to decide the vexed issue of HPL’s ownership.
The company has contested before the high court that there could not be any case for Chatterjee to seek arbitration on the ownership issue since he had exhausted all options in this matter available to him under civil suits. Chatterjee has made the Bengal government and HPL parties to the arbitration process.
HPL has also contested that the contracts mentioned by Chatterjee in the arbitration process were time bound: they had lost their validity after a certain period.
Chatterjee has always maintained that he has the majority stake in the Rs 10,000- crore HPL in which the Bengal government is the other major shareholder.
He fought with the erstwhile Left Front government over ownership but lost the case in the high court. He challenged the matter in the Supreme Court, which also refused to overturn the high court ruling.
Chatterjee then decided to take the Bengal government to the ICA after failing to coax the state to part with a majority share. The Telegraph had first reported about Chatterjee moving the ICA on March 27.
Chatterjee used a provision existing in the joint venture agreement between The Chatterjee Group and the West Bengal Industrial Development Corporation dating back to the mid-90s whereby either party could approach the ICA.
TCG had maintained that the Supreme Court judgment did not strike down various agreements between it and the WBIDC, especially the one drawn in 2002, whereby it was to be made a majority owner of HPL by the transfer of 15.5 crore shares from the state to the private promoter.
TCG pressed the state to honour the agreement and transfer the shares. The state, after seeking legal counsel, decided against it, opining those agreements are not valid any more.
The state said it would rather auction its shares or sell via some other transparent manner (IPO) when the valuation was good instead of handing over the majority control.
The fresh legal battle comes at a time the company is going through one of the worst phases. After suffering a loss of over Rs 1,900 crore in the last four years, including Rs 900 crore in the last fiscal itself, HPL is set to report at least Rs 300-crore loss during this fiscal.
Lenders to HPL have flagged off the precarious financial condition of the company and have requested both principal promoters WBIDC and TCG to arrange for fresh equity.
The Bengal government has initiated a dialogue with the Indian Oil Corporation to pump money into HPL.
The fresh bout of legal problems is bound to take its toll on the government’s effort to bring in fresh money by any investor, especially Indian Oil Corporation.