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Paris say in HPL stake tiff

Calcutta, Dec. 10: The Supreme Court today allowed The Chatterjee Group, the private promoter of Haldia Petrochemicals, to approach the International Court of Chambers in Paris, effectively stalling the Mamata Banerjee government’s efforts to induct Indian Oil Corporation as a strategic partner in the state’s showcase project.

The apex court directed the Bengal government and HPL to resolve their dispute with TCG over a crucial block of 15.5 crore shares, or about 9 per cent of HPL’s stake, by arbitration.

Legal observers said the verdict would give TCG an advantage, given its international stature, over the state when the matter is fought at the ICC.

The matter could take about a year to be resolved. TCG had begun the arbitration proceeding in March 2012, which The Telegraph had reported first.

“We direct the parties to resolve their disputes through arbitration as mentioned in clause 15 of the letter of agreement dated January 12, 2002 in accordance with the Rules of ICC,” a division bench comprising justices G.S. Singhvi and V. Gopala Gowda said.

The apex court rejected the arguments of the state, HPL and the West Bengal Industrial Development Corporation (WBIDC) that the dispute could be resolved only in the courts of Calcutta.

The apex court today termed the January 12, 2002 pact between the then Buddhadeb Bhattacharjee government and Chatterjee Petrochem India (Pvt) Ltd the “principal agreement”.

The agreement had talked about handing out management control to TCG by giving away 15.5 crore shares by the WBIDC.

The company had transferred the shares but did not register them in the name of TCG firms as the private promoter had allegedly reneged on its commitment to infuse funds.

“I am disappointed with the judgment and the course taken by the private promoter. Instead of investing in the company, he (TCG chairman Purnendu Chatterjee) is spending money to fight legal battles in courts of Calcutta, Delhi and Paris,” Bengal industries minister and HPL chairman Partha Chatterjee said.

A TCG spokesperson said the group was worried about the financial health of HPL. “Law will take its own course and ownership dispute will be resolved at some point. But the company is in bad shape and that is the worry. This is why we had offered to infuse Rs 500 crore in HPL,” the spokesperson said.

The entire net worth of Haldia Petrochemicals could get wiped out in this quarter and it could become a potentially sick company fit to be referred to the Board for Industrial and Financial Reconstruction (BIFR).

TCG had offered the money but had laced it with conditions of management control. The state government rejected the proposal and went ahead with the stake sale process.

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