In re­lief for ONGC, HC re­jects Reliance Naval’s plea on ves­sels deal

Mint ST - - NEWS - [email protected] MUMBAI

The Bom­bay high court has re­jected a writ pe­ti­tion filed by Reliance Naval and En­gi­neer­ing Ltd (RNEL) against Oil and Nat­u­ral Gas Corp. (ONGC) af­ter the oil ex­plorer ended a deal for the sup­ply of a dozen ves­sels to sup­port off­shore oil ex­plo­ration. The rul­ing has come as a ma­jor re­lief for ONGC.

RNEL, which is con­trolled by Reliance In­fra­struc­ture Ltd, had in its pe­ti­tion said ONGC has re­fused to take de­liv­ery of the eighth ves­sel and also in­voked a bank guar­an­tee. The high court ruled that when there is a clause giv­ing the par­ties to the agree­ment the op­tion of go­ing for ar­bi­tra­tion, the com­pa­nies must do so rather than fil­ing cases in court.

“We are of the con­sid­ered view that this can be done in the ar­bi­tra­tion pro­ceed­ings, which are pro­vided un­der the con­tract if the par­ties choose to do so or in the civil suit if the pe­ti­tioner (RNEL) de­sires to take re­course to the same,” ruled a bench com­pris­ing jus­tices B.R. Gavai and Riyaz I. Chagla. “In that view of the mat­ter pe­ti­tion is re­jected, rel­e­gat­ing pe­ti­tioner to the or­di­nary rem­edy avail­able to it in the law,” it said.

The com­pany, part of bil­lion­aire Anil Am­bani’s di­ver­si­fied Reliance Group, was seek­ing a re­fund of more than $6.6 mil­lion (about ₹45 crore), which ONGC in­voked as per­for­mance bank guar­an­tee, along with $15.46 mil­lion as pay­ment for eighth off­shore ves­sel that it built forin­dia’slargest ex­plorer. RNEL also sought court’s in­ter­ven­tion to di­rect ONGC to take de­liv­ery of the eighth ves­sel.

“Undis­put­edly, in the present case, the ves­sels were not de­liv­ered to re­spon­dent (ONGC) within a pe­riod of 30 months as pro­vided in the con­tract,” the court ob­served in its or­der of 30 Novem­ber.

Email queries to ONGC and RNEL did not elicit any re­sponse till press time.

Reliance Group com­pa­nies have sued HT Me­dia Ltd, Mint’s pub­lisher, and nine oth­ers in the Bom­bay high court over a 2 Oc­to­ber 2014 front-page story that they have dis­puted. HT Me­dia is con­test­ing the case.

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