India To Seek Arbitration Against Karsan In Urea Case

NFL managing director Ibrahim Thomas has already faxed a letter to the Turkish company terminating the agreement for the supply of 20,000 tonnes of urea for which the advance payment of Rs 133 crore was made in December 1995.

Fertiliser secretary Indrajit Chaudhary said the solicitor general had already been consulted in this regard and the process was set into action to initiate arbitration proceedings against the defaulting the Karsan company. A formal case in the international court is likely to be filed by the authorities within a week.

He said the Karsan company had failed to fulfill the contractual obligations of delivering the whole amount of urea after the second extension granted to the company till October four.

 

Earlier, the company was supposed to send the urea shipment to the country by May 5 this year but had failed to do so. Karsan had sent 9006 tonnes of urea to the Bhavanagar port in Gujarat as first the installment of its contract. However, the Indian authorities refused to take the shipment as the urea sent was not upto the specifications of the contract and was found to be of inferior quality.

As a result, the ship carrying the urea, MV Izmail, was turned back and not allowed to unload the shipment at the Indian port.

The two top executives of the Karsan company including its managing director Tuncay Alankus and executive director Cian Karanchi were arrested by the Interpol in Geneva on September 16 following issuance of warrants by the CBI after an FIR was lodged in the case in July this year.

The urea deal turned into a scam as the money sent as advance to the tune of Rs 133 crore had reportedly disappeared from the Swiss bank accounts within a few days of its deposit.

Prabhakar Rao, son of former Prime Minister P V Narasimha Rao, Prakash Yadav, son of former union minister Ram Lakhan Yadav and Indian agent of Karsan company Sambasiva Rao have already been questioned by the CBI with regard to the controversial deal.