India’s third-largest iron ore miner ,Fomento Resources, said its five-year legal battle with state-owned Pakistan Steel Mills (PSM) over an earlier ore supply contract came to an end after the steel maker paid compensation of Canadian $8.9 million (Rs 48 crore) to it earlier this month.
The matter related to a 2004 contract between the two for supply of 125,000 tonnes of ore every year to PSM. The Goa-based mining company had filed a case against PSM in the International Court of Arbitration (ICA) in London after PSM terminated the contract, alleging substandard supply. The ICA upheld the appeal in 2008 and gave a ruling in favour of Fomento, imposing the penalty. PSM, however, had avoided payment despite repeated reminders by Fomento, the miner alleges.
Fomento had further filed an appeal in the Supreme Court of British Columbia in Canada in May last year, pleading that a vessel full of coal from Canada to PSM must be stopped till the award given by the ICA was settled by PSM. The Canadian Court upheld the appeal and ordered arrest of the vessel in May 2011, according to Fomento. “We are relieved as, following the Canadian court’s order, PSM has paid the compensation amount of C$8.9 million to us on May 18,” Fomento’s managing director, Ambar Timblo, told Business Standard.
While PSM has paid the penalty, the case has made Fomento wary of further dealings with it “Based on this experience, it seems unlikely that we would bid in future for PSM’s tenders,” Timblo said. PSM could not be reached for comments.
