Orissa HC Rejects Vedanta Plea On 150 MT Bauxite Supply Agreement
Court says terminated pacts cannot be revived; Vedanta reviewing order, says existing supplies unaffected: Reports
BHUBANESWAR: The Orissa High Court has dismissed a petition filed by Vedanta Ltd seeking enforcement of agreements with the Odisha Mining Corporation (OMC) for the supply of 150 million tonnes of bauxite under a pricing mechanism agreed upon in 2004.
Vedanta had approached the court seeking directions to the OMC to honour agreements executed in 2004 and 2009, along with earlier memoranda of understanding (MoUs), under which it claimed entitlement to long-term bauxite supplies for its aluminium operations in Odisha.
Under the October 2004 agreement, Vedanta was to receive 150 million tonnes of bauxite, with the price linked to the cost of production and a royalty component. The company contended that it had made substantial investments in Odisha relying on assurances of long-term availability of bauxite and a stable pricing mechanism.
The court, however, held that the agreements relied upon by Vedanta had already been terminated and could not be revived or indirectly enforced at this stage.
The division bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman noted that following amendments to the Mines and Minerals (Development and Regulation) Act, the OMC had terminated the relevant joint venture agreements in September 2015 after providing Vedanta an opportunity to present its case.
The bench observed that the termination had not been challenged by Vedanta at the relevant time and had consequently attained finality. The company, therefore, could not seek revival of the agreements after a considerable lapse of time, the court held.
The High Court also upheld the OMC’s approach to determining the applicable price of bauxite under the prevailing legal framework.
Appearing for the Odisha government, Advocate General Pitambar Acharya argued that Vedanta’s plea was barred by delay, waiver and acquiescence and should be rejected.
The court dismissed the petition and vacated the interim orders passed during the proceedings, permitting the OMC and other authorities to take further action in accordance with law.
Following the judgment, a Vedanta Aluminium spokesperson said the company was reviewing the order and evaluating the legal options available to it.
The company also said the judgment would not affect its existing bauxite supplies.