The Supreme Court on Monday referred to an arbitration tribunal the Rs 7,800 crore dues sought by Indian Oil Corporation (IOC) from Arcelor Mittal Nippon Steel Limited (AMNSL), which has taken over the Ruias-owned Essar Steel India Limited (ESIL).

The dispute relates to non-payment of dues to the tune of Rs 7,800 crore by the erstwhile ESIL to IOC towards supply of gas till 2009

A bench of Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala and Justice J.B. Misra allowed AMNSL and IOC to pursue the arbitration remedy to resolve their outstanding disputes, including the question whether the dispute was arbitral in nature or not.

The apex court passed the directions on an appeal filed last year by IOC challenging a Delhi High Court order which had earlier held that the dispute between ANMSL and IOC was not arbitral in nature.

The court had ruled in favour of Arcelor that the dispute was not arbitral in nature. Aggrieved, the IOC had filed the present appeal.

IOC and AMNSL will now have to appoint one individual arbitrator each.

The two arbitrators in turn will choose a third arbitrator to constitute a three-member tribunal to resolve the dispute.

“The Delhi High Court judgment dated October 10, 2023 is rendered infructuous…” Chief Justice Chandrachud said while dictating the order.

In 2019, ANMSL had taken over ESIL after being selected as the successful resolution applicant under the Insolvency Bankruptcy Code, 2016.

While IOC was represented by Solicitor General Tushar Mehta, senior advocates-Harish Salve and Abhishek Manu Singhvi appeared for ANMSL.