GEECL claims more than Rs 100 cr from Matix Fertilizers over GSPA dispute

Natural gas producer Great Eastern Energy Corporation Limited (GEECL) has claimed more than Rs 100 crore from Matix Fertilisers & Chemicals Limited, allegedly for not adhering to the terms of the Gas Sale and Purchase Agreement (GSPA).

This may come as a blow to Matix which operates West Bengal's only large integrated fertilizer plant at Panagarh near Durgapur and claims to have a 20 per cent market share in eastern India.

Matix did not want to make any comment on the development stating that the matter is sub-judice.

The coal-bed methane gas producer entered into a GSPA with Matix in July 2017, which was valid till August 31, 2018. It claimed that Matix did not honour the Minimum Guarantee Offtake clause.

According to the latest accounts notes, GEECL had then claimed Rs 148 crore including interest from Matix. GEECL also claimed that following arbitration, the company owes nearly Rs 112 crore including interest. It subsequently approached a commercial court in Rajarhat to execute the arbitration order.

In response, Matix moved the Delhi High Court seeking a stay on the order.

The high court on January 11 said, "On submission, the award is stayed subject to deposit of the 'entire award amount' along with 50 per cent of the interest within a period of three weeks. The money be deposited in fixed deposit receipt."

A Matix spokesperson said, "The referred matter is currently being heard in the honourable High Court, Delhi. The court has also stayed the order of the Commercial Court dated 8th January 2024."

The spokesperson, however, did not respond to further queries about whether Matix is going to deposit the amount to operationalise the stay order and how far the claim amount will impact the company.

GEECL spokesperson said that according to the Delhi High Court's order, Matix has to deposit around Rs 100 crore consisting of the total award amount and 50 per cent of the interest to operationalise the stay.

"But the execution order dated January 8, 2024, passed by the Commercial Court, Rajarhat, Kolkata, attaching Matix's property along with bank accounts directing to leave aside a sum of Rs 112.79 crore, still holds good and not stayed," the GEECL spokesperson claimed.

Both companies expressed optimism on their respective stands.