The Supreme Court ordered Global Steel Holding Limited (GSHL) and Global Steel Philippines Inc. (GSPI) to pay Rs. 600 crore as interest to State Trading Corporation (STC/ appellant) for the settlement of a dispute..The order was passed by a Bench of Justices AM Sapre and Indu Malhotra in an appeal filed by STC against an order of the Delhi High Court..By way of background, a tripartite agreement was entered into between STC and the respondents, GSHL and GSPI in 2005, for purchase and sale of commodities known as HR Coils and CR Coils..In the performance of the agreement, disputes arose between the parties, particularly with respect to the non-payment of outstanding dues to the appellant STC. The parties, therefore, decided to settle their disputes by means of conciliation proceedings with the assistance of two Conciliators..The parties entered into a Settlement Agreement under Section 73 of the Arbitration and Conciliation Act, 1996. In terms of the Settlement Agreement, the GSHL and GSPI agreed to pay a total amount of US$ 355,818,019.29 with interest @ 13.25 percent per annum to STC. However, they committed default in the payment of the amount..The parties, therefore, entered into another Settlement Agreement dated May 17, 2012 through the intervention of the Conciliators..As per the second Settlement Agreement, GSHL and GSPI agreed to pay a total amount of US $ 347,737,209.68 inclusive of interest at the rate of 13.50 % p.a. (Rs.1605 crores in Indian currency) by November 10, 2010..Both the Settlement Agreements were executed by Pramod Mittal as Chairman of GSHL and GSPI..As per the second settlement agreement, Pramod Mittal furnished a personal guarantee by which he assured payment of the outstanding amount payable by GSHL and GSPI to the appellant, STC..However, GSHL and GSPI defaulted again, whereupon STC filed an execution petition in the Delhi High Court. The Delhi High Court, however, dismissed the same on March 9, 2015 on the ground that none of the judgment debtors was located within the jurisdiction of the Court. This led to the appeal in Supreme Court..During the hearing of the case, Senior Advocate Kapil Sibal appearing for GSHL and GSPI, submitted that an amount of Rs. 810 crore was paid towards the outstanding liability under the two Settlement Agreements..Further, when the matter was taken up for final hearing, the respondents offered to deposit Rs. 800 crore, without prejudice to their right to prosecute the case, within four weeks, to show their bona fides to the Court. The Court recorded the said submission in its order passed on October 31..On November 29, the Senior Counsel brought demand drafts for Rs.810 crore in favour of the decree holder – STC. When the matter was taken up for hearing on December 4, the demand drafts for Rs. 800 crores were directed to be handed over to the Court Master in a sealed envelope..The Court noted these factual aspects in its judgment passed yesterday and observed that the entire liability of the respondents till November 10, 2012 stands discharged..It proceeded to order that the demand drafts for Rs. 800 crore furnished by the respondents be handed over to STC. Importantly, it directed that interest at the rate of 8% per annum be paid on the principal sum of Rs. 1610 crore starting from November 10, 2012. Thus, an amount of Rs. 600 crore was directed to be paid by the respondents to STC..“Lumpsum amount of Rs.600 crores (Rupees Six Hundred Crores) worked out on the basis of 8% S.I. per annum (rounded off) be paid by the respondents to the appellant towards full and final satisfaction of the amounts due under the Settlement Agreement dated 15.11.2010, and Further Settlement Agreement dated 17.05.2012.”.The interest has to be paid within twelve weeks..The Court also made it clear that if the amount of Rs. 600 crore is not paid on or before February 28, 2019, it would amount to contempt of the order passed by the Supreme Court. It would then be open to the appellant to take appropriate action against the respondents in accordance with law for non-compliance..Since the parties agreed to the termination of the proceedings by virtue of the above settlement arrived at by way of Court’s directions, the Court found it fit not to decide the legal issues involved in the case..“Having heard the learned senior counsel for the parties, and on perusal of the record, we are of the considered opinion that it is not necessary to decide the various legal issues arising in the case.”.Senior Advocate Dushyant Dave along with advocate Uday Gupta appeared for STC. The respondents were represented by Senior Advocate Kapil Sibal along with advocate Gautam Mitra. The Court recorded its appreciation for the two Senior Counsel for their efforts in enabling the parties to resolve the dispute..“At this juncture, we consider it appropriate to place on record our appreciation of the valuable assistance provided by both the senior counsel, Mr. DA Dave and Mr. Kapil Sibal in enabling the parties to resolve the disputes. The senior counsel addressed the myriad legal issues which arose in the case with clarity, persuasiveness, lucidity and industry.”.Read the judgment below.
The Supreme Court ordered Global Steel Holding Limited (GSHL) and Global Steel Philippines Inc. (GSPI) to pay Rs. 600 crore as interest to State Trading Corporation (STC/ appellant) for the settlement of a dispute..The order was passed by a Bench of Justices AM Sapre and Indu Malhotra in an appeal filed by STC against an order of the Delhi High Court..By way of background, a tripartite agreement was entered into between STC and the respondents, GSHL and GSPI in 2005, for purchase and sale of commodities known as HR Coils and CR Coils..In the performance of the agreement, disputes arose between the parties, particularly with respect to the non-payment of outstanding dues to the appellant STC. The parties, therefore, decided to settle their disputes by means of conciliation proceedings with the assistance of two Conciliators..The parties entered into a Settlement Agreement under Section 73 of the Arbitration and Conciliation Act, 1996. In terms of the Settlement Agreement, the GSHL and GSPI agreed to pay a total amount of US$ 355,818,019.29 with interest @ 13.25 percent per annum to STC. However, they committed default in the payment of the amount..The parties, therefore, entered into another Settlement Agreement dated May 17, 2012 through the intervention of the Conciliators..As per the second Settlement Agreement, GSHL and GSPI agreed to pay a total amount of US $ 347,737,209.68 inclusive of interest at the rate of 13.50 % p.a. (Rs.1605 crores in Indian currency) by November 10, 2010..Both the Settlement Agreements were executed by Pramod Mittal as Chairman of GSHL and GSPI..As per the second settlement agreement, Pramod Mittal furnished a personal guarantee by which he assured payment of the outstanding amount payable by GSHL and GSPI to the appellant, STC..However, GSHL and GSPI defaulted again, whereupon STC filed an execution petition in the Delhi High Court. The Delhi High Court, however, dismissed the same on March 9, 2015 on the ground that none of the judgment debtors was located within the jurisdiction of the Court. This led to the appeal in Supreme Court..During the hearing of the case, Senior Advocate Kapil Sibal appearing for GSHL and GSPI, submitted that an amount of Rs. 810 crore was paid towards the outstanding liability under the two Settlement Agreements..Further, when the matter was taken up for final hearing, the respondents offered to deposit Rs. 800 crore, without prejudice to their right to prosecute the case, within four weeks, to show their bona fides to the Court. The Court recorded the said submission in its order passed on October 31..On November 29, the Senior Counsel brought demand drafts for Rs.810 crore in favour of the decree holder – STC. When the matter was taken up for hearing on December 4, the demand drafts for Rs. 800 crores were directed to be handed over to the Court Master in a sealed envelope..The Court noted these factual aspects in its judgment passed yesterday and observed that the entire liability of the respondents till November 10, 2012 stands discharged..It proceeded to order that the demand drafts for Rs. 800 crore furnished by the respondents be handed over to STC. Importantly, it directed that interest at the rate of 8% per annum be paid on the principal sum of Rs. 1610 crore starting from November 10, 2012. Thus, an amount of Rs. 600 crore was directed to be paid by the respondents to STC..“Lumpsum amount of Rs.600 crores (Rupees Six Hundred Crores) worked out on the basis of 8% S.I. per annum (rounded off) be paid by the respondents to the appellant towards full and final satisfaction of the amounts due under the Settlement Agreement dated 15.11.2010, and Further Settlement Agreement dated 17.05.2012.”.The interest has to be paid within twelve weeks..The Court also made it clear that if the amount of Rs. 600 crore is not paid on or before February 28, 2019, it would amount to contempt of the order passed by the Supreme Court. It would then be open to the appellant to take appropriate action against the respondents in accordance with law for non-compliance..Since the parties agreed to the termination of the proceedings by virtue of the above settlement arrived at by way of Court’s directions, the Court found it fit not to decide the legal issues involved in the case..“Having heard the learned senior counsel for the parties, and on perusal of the record, we are of the considered opinion that it is not necessary to decide the various legal issues arising in the case.”.Senior Advocate Dushyant Dave along with advocate Uday Gupta appeared for STC. The respondents were represented by Senior Advocate Kapil Sibal along with advocate Gautam Mitra. The Court recorded its appreciation for the two Senior Counsel for their efforts in enabling the parties to resolve the dispute..“At this juncture, we consider it appropriate to place on record our appreciation of the valuable assistance provided by both the senior counsel, Mr. DA Dave and Mr. Kapil Sibal in enabling the parties to resolve the disputes. The senior counsel addressed the myriad legal issues which arose in the case with clarity, persuasiveness, lucidity and industry.”.Read the judgment below.