Numetal questions ArcelorMittal eligibility to bid for Essar Steel before NCLAT

Russia's VTB Capital-backed Numetal Ltd, which is in the race to acquire Essar Steel, today alleged that rival ArcelorMittal India Ltd is not eligible to bid for the debt-ridden company under the IBC as it was the promotor of two defaulting companies Uttam Galva and KSS Petron.

During the proceedings of the National Company Law Appellate Tribunal (NCLAT), Numetal submitted that as per the rules of the Insolvency & Bankruptcy Code (IBC), ArcelorMittal should have first clear the dues by making upfront payment before submitting its resolution plan for Essar Steel.

Senior advocate Mukul Rohatgi appearing for Numetal said that although ArcelorMittal has offered to pledge Rs 7,000 crore in an escrow account but that is conditional.

"If they win they would pay, if not then it would be scrapped," he said.

According to Rohatgi, "This payment should have been upfront and should be before the first day when you ArcelorMittal have made bid."