Xinhua reported that Chinese power equipment manufacturer Shanghai Shandong Nuclear Power Construction has filed a case against multi national mining giant Vedanta Aluminium for allegedly causing losses due to work stoppage at the latter's controversial alumina refinery in Lanjigarh in India's eastern state of Odisha.
SSNP has pleaded for arbitration to recover its dues against Vedanta saying the firm has incurred "tremendous losses".
The dispute can be traced back to Vedanta's controversial plan to expand its alumina capacities in Lanjigarh with bauxite mined from the nearby Niyamgiri hills. The Indian environment ministry put a stop to the plans by denying clearance, thus depriving the alumina plant of a crucial raw material and forcing it to shut down.
According to the petition, the order for a power plant by Vedanta Aluminium was placed in 2008 for setting up co generation units on a turn key basis for the Lanjigarh project.
Shandong was contracted for five jobs to build a 210 MW co generation power plant project that included offshore engineering and technical services, an offshore supply contract and onshore supply contract and onshore services and construction contract.
Mr Mahesh Londhe of Sanjay Udeshi & Company the law firm representing SSNP said that "As per the EPC (Engineering, Procurement and Construction) contracts, it was the obligation of Vedanta Aluminum to obtain clearance from the Ministry of Environment & Forests.”
Vedanta directed Shandong to suspend all "construction activities" at the site after the ministry order. The long duration of suspension, the petition said, has caused "tremendous loss" to Shandong.
The Chinese company has cited a clause in the contract which empowers it to terminate the contract if the suspension of the agreement continues for over 180 days and at the end of it, after a thirty-day prior notice, Vedanta will pay 105% of the cost incurred by the contractor till the date of termination as compensation.
Mr Londhe said that "As per the obligations under EPC contracts, Shandong was promised that at no point, the Chinese equipment maker would suffer any loss.”
Source - Xinhua
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