NCLT directs ArcelorMittal to pay Rs 1,300 crores CIRP cost to Odisha Slurry Pipeline Infrastructure

The National Company Law Tribunal, Ahmedabad Bench has directed ArcelorMittal India, the successful Resolution Applicant of Essar Steel, to pay CIRP cost of almost Rs 1,300 crores to Odisha Slurry Pipeline Infrastructure (Srei Infrastructure Finance Limited vs ArcelorMittal India Pvt Ltd).ArcelorMittal has been directed to pay the CIRP costs by December 15, 2020..The order was passed by a two-member bench of MB Gosavi, Member (Judicial) and VK Gupta, Member (Technical) in an application moved by Srei Infrastructure Finance Limited, a financial creditor of Odisha Slurry Pipeline Infrastructure Ltd..In its application under Section 33(3) and 33(4) read with Section 60(5) IBC, Srei Infrastructure Finance Limited (Applicant) contended that ArcelorMittal contravened the Resolution Plan for Essar Steel when it failed to pay the "Right to Use Charges" to the Odisha Slurry Pipeline Infrastructure Ltd for its pipeline asset. .These usage charges were hypothecated to the Applicant by Odisha Slurry Pipeline Infrastructure Ltd (OSPIL). .The Applicant inter alia submitted that the "Right to Use Charges" payable for the use of the pipeline belonging to OSPIL during the CIRP of Essar Steel constituted as CIRP cost within the meaning of Section 5(3)(c) IBC..ArcelorMittal, on the other hand, stated that after the approval of OSPIL Resolution Plan by the Adjudicating Authority and its subsequent implementation, the Applicant had no locus to file the present application as a financial creditor of OSPIL..It inter alia was argued that insolvency resolution proceedings were for rehabilitation of a corporate debtor and were not in the nature of recovery proceedings..ArcelorMittal also stated that the present application was nothing but a fresh money claim. .In conclusion, after analysing the relevant documents and the material on record, the NCLT held that the usage charges for the use of the slurry pipeline for running Essar Steel as a going concern constituted as CIRP costs..The NCLT noted that the CIRP costs were duly considered and provided for in the Resolution Plan by ArcelorMittal. .However, ArcelorMittal contravened the provisions of such approved Resolution Plan by not making payment of the CIRP costs..NCLT further observed that since OSPIL had hypothecated the charges to the Applicant, any payment of CIRP costs was going to directly benefit the Applicant..Hence, keeping in view the scheme and object of the Code, the NCLT concluded that the Applicant was eligible to file the present application as it was not a stranger to the claim. .The NCLT thus directed ArcelorMittal to pay the entire RTU Charges which according to Srei was Rs. 1,300 crores (approximately) within 15.12.2020 failing which liquidation order may be passed by the Tribunal in accordance with Section 33 of IBC, 2016..Srei Infrastructure Finance Limited was represented by Senior Advocates Rashesh Sanjanwala, Ratnanko Banerjee with Advocate Rishav Banerjee. They were briefed by Sandeep Singhi, Partner and Gaurav Mathur, Partner, M/s. Singhi & Co as well as Advocate Supriyo Gole..Arcelor Mittal India Private Limited was represented by Senior Advocates Neeraj Kishan Kaul, Kamal Trivedi with Advocate Keyur Gandhi..Essar Steel was represented by Senior Advocate Ravi Kadam with Advocates Ashim Sood, Nirag Pathak..Erstwhile Resolution Professional of Essar Steel was represented by Senior Advocate Navin Pawha briefed by Cyril Amarchand Mangaldas..Read the Order:

NCLT directs ArcelorMittal to pay Rs 1,300 crores CIRP cost to Odisha Slurry Pipeline Infrastructure

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