London court dismisses ArcelorMittal plea against Essar

A UK court has refused to issue a worldwide freezing order against the parent company of Essar Steel Ltd and members of promoter family - Ravi and Prashant Ruia.

The order came as steelmaker ArcelorMittal looked to enforce a USD 1.5 billion arbitral award stemming from a soured supply agreement.

In an 81-page judgment, High Court Judge Andrew Henshaw on Monday found no merit in the case being brought by ArcelorMittal to enforce a worldwide freeze on Essar's assets to protect them from "dissipation" while the former pursues parallel legal remedies.

Reached for comments, ArcelorMittal hinted it may appeal against the judgment while an Essar spokesperson welcomed the decision saying the firm has "consistently argued that the underlying claims of wrongdoing and therefore the applications for the freezing orders were (and continue to be) ill-conceived and without any factual support."
ArcelorMittal in a statement said: "This is a complex dispute relating to alleged conspiracies to harm ArcelorMittal USA. The recent judgment is subject to appeal and is in any event ancillary to the main conspiracy claim against members of the Ruia family and Essar Group's parent company, amongst others."
Basis this finding, the judge ordered that "I do not, however, consider the evidence before me indicates that the Essar group, and the individuals who control it, transfer assets and funds between group companies deliberately in order to evade the claims of certain creditors."
An Essar spokesperson said: "Given the judgment, it is clear that AMUSA will need to reconsider carefully if it has any basis to continue its spurious claims in England. We intend to vigorously defend any pursuit of these claims by AMUSA, as well as to defeat claims and actions that AMUSA wrongly continues to pursue in other jurisdictions, based on similarly baseless accusations and inferences."
ESSAR spokesperson further said: "Essar remains fully focused on our business strategy, that has seen Essar reduce its debt by USD 22 billion over recent years, the largest by any corporate to date, and Essar is now looking to reinvest in exciting business and ventures in India and elsewhere."