Vedanta-NALCO Dispute : Attorney General Seeks Time To Respond To Supreme Court's Suggestions For Settlement

The Supreme Court on Tuesday commenced hearing a contempt petition preferred by Vedanta Ltd against National Aluminium Company Ltd (NALCO) alleging non-compliance of the order dated January 14, 2020 by which a 3-judge bench had allowed Vedanta to bid for NALCO's alumina tenders meant for exports. During the course of hearing, the bench of Justices DY Chandrachud, AS Bopanna and V Ramasubramanian pondered on the solutions such as NALCO not insisting on LET Export Order, Vedanta providing to NALCO the bill of export and certification of goods having been admitted into the SEZ by the concerned officer of the SEZ as per Rule 30 of the SEZ Rules. The bench further asked the Attorney General for India KK Venugopal to suggest further requirements which it could add over and above the conditions suggested by the bench. On January 14, 2020, a bench comprising the then Chief Justice SA Bobde, Justices BR Gavai and Surya Kant was considering a SLP filed by NALCO against Odisha High Court's order which had allowed Vedanta to take part in the tenders for the sale of its alumina. While considering the same, the Top Court had passed the following order: The respondent(s) shall apply to the appellant viz National Aluminium Company Limited (NALCO), through its any foreign subsidiary company. The appellant - NALCO shall register the respondent(s) if the application is in accordance with the requirements.The appellant – NALCO further accepts that it shall register Vedanta Resources Limited , a company incorporated in the United Kingdom, or any other foreign subsidiary of the respondent - M/s Vedanta Limited which is eligible to participate in its tenders for calcined alumina. However, the delivery of the consignment may be taken at Visakhapatnam Port on FOB basis, though the same will be for use in M/s Vedanta Limited SEZ at Jharsuguda, Odisha.As desired by NALCO in its affidavit dated 10.01.2020, the respondent – M/s Vedanta Limited undertakes to provide to NALCO the bill of export and certification of goods having been admitted into the SEZ by the concerned officer of the SEZ as per Rule 30 of the SEZ Rules. After the Top Court's order, Vedanta Resource Limited had emerged as successful bidder for NALCO's alumina tender but NALCO had refused to allow the UK Firm to take the consignment to its SEZ unit and had insisted on terminating the transaction at Visakhapatnam Port. The producer also asked VRL to obtain Let Export Order (LET), a mandatory requirement for the purpose of completion of the transaction, from the Customs authorities at Visakhapatnam Port. This had resulted in Vedanta preferring a contempt petition alleging "wilful disobedience" of the January 14, 2020 order. Vedanta had alleged that NALCO was not making delivery at Visakhapatnam Port on FOB basis. In the first contempt preferred, the Top Court on August 19, 2020 had directed National Aluminium Company (NALCO) to ensure delivery calcined alumina to Vedanta firm at Visakhapatnam on FOB basis to be used in in Vedanta's SEZ unit at Jharsuguda, Orissa. Counsel for NALCO had agreed in effecting the delivery of the same if it was meant to be used in M/S Vedanta Limited SEZ at Jharsuguda, Odisha and even Vedanta Limited had agreed to provide the bill of export and necessary certification under Rule 30 of the SEZ Rules. What Transpired In The Supreme Court Today? State Of Desperation Because If We Can't Get It From Here We'll Have To Get It From Abroad; Vedanta Situated In SEZ Which Is Equal To Or Akin To Foreign Entity: Senior Advocate Mukul Rohatgi When the matter was called for hearing, Senior Advocate Mukul Rohatgi appearing for Vedanta Limited submitted that Vedanta Limited had preferred a 2nd contempt petition. Terming the contempt as "gross", Senior Counsel contended that one of the condition imposed by NALCO in their tender was to only sell alumina to a foreign entity. He further added that since Vedanta was a company situated in SEZ in Jharsuguda, Orissa, it was akin or equal to a foreign entity and transfer of goods from Domestic Tariff Area to SEZ was deemed to be export. "Petitioner is a company situated in SEZ in India and SEZ is in a place called Jharsuguda in Orissa and SEZ are huge industrial parts so the petitioner has a factory in SEZ for manufacture of aluminium. Raw material is Alumina. NALCO has a virtual monopoly in India for selling and producing Alumina. They also manufacture aluminium but they have excess of Alumina which they sell by tender and have peculiar condition that they only sell to foreign entity. Petitioner, though an Indian company, being situated in SEZ, by legal fiction, is situated in an area which is technically not called India. Rest of India - SEZ is called Domestic Tariff Area. Law creates a fiction that you are not in India- these areas which have more freedom to operate beyond the areas of India. So I'm in an SEZ which ...

Vedanta-NALCO Dispute : Attorney General Seeks Time To Respond To Supreme Court's Suggestions For Settlement

Shruti Kakkar

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