Court summons Visa Group promoters in contract default case

The Khurda district court has summoned the promoters of Visa Group of companies to appear before it on June 28 in a contract default case filed by Indian Metals and Ferro Alloys (IMFA).

Though IMFA had sought ex parte relief, the court has said, it would give its verdict on the case only after hearing the opposite parties.

IMFA had filed the case against Visa Group last month, accusing an overseas subsidiary of the latter of reneging on a trading contract.

It took the matter to the court after unsuccessful attempts to solve the problem through international arbitration process.

In 2008 August, IMFA had entered into an agreement with Switzerland-based Visa Comtrade AG to sell ferro chrome to overseas Chinese buyers. The tenure of the contract was for three months.

 

But soon after the agreement, the commodity exporter expressed its inability to honour the contract citing poor demand in international market following persisting economic weakness at that time.

IMFA then initiated arbitration proceedings at the International Chamber of Commerce in Paris as per the terms of the agreement.

Visa Comtrade AG, which meanwhile changed its name to Far East Trading AG, did not cooperate with the proceedings. In fact, while the arbitration was under way, Visa Group declared the particular company bankrupt and filed an application to liquidate it.IMFA then approached the court to resolve the matter and demanded that Visa be directed to submit a security of $4.5 million or approximately Rs 25 crore with the court. The Khurda district court, while observing that the connection between the subsidiary and the parent company is yet to be established, has summoned the promoters of VISA Group for appearance and show cause on June 28.