ET reported that Essar Steel's Canadian unit is likely to be taken to court in the US for breach of contract and pressed for damages amounting to USD 75,000 by International Coal Group.

As per report, ICG plans to sue Essar Steel Algoma for allegedly not honoring a contract to accept delivery of metallurgical coal that was contracted in 2008.

International Coal has already filed a complaint in the US district court for the southern district of West Virginia. ICG is learnt to be seeking more than USD 75,000 in damages from Essar Steel Algoma. When contacted, an Essar Steel spokesperson declined to comment.

According to the complaint, Essar Steel Algoma had, last year, agreed to buy 42,000 tonne of coal at USD 175 per tonne on July 30th 2008 and an additional 22,100 tonne at USD 215 per tonne on September 18th 2008. However, according to ICG, Essar Steel Algoma accepted just 29,409 tonne under the two agreements and cancelled the orders. ICG also alleged that Essar Steel Algoma changed payments terms.

(Sourced from www.economictimes.com)