SEPCO III takes Vedanta to court over guarantee invocation

Disputes between SEPCO III Electric Power Construction Corporation and Vedanta Ltd over Off Shore Supply Contract and commercial operation of coal based power plant of 3600 MW capacity located near Jharsuguda have landed in the Bombay high court.
Vedanta invoked its Bank Guarantees of over 29 million USD on May 28 and an aggrieved Shandong Electric Power Construction Corporation III, a Chinese company, then filed an Arbitration Petition before the Vacation Bench of the HC on Thursday. Lawyers Simil Purohit and Nishit Dhruva who represented Vedanta sought an adjournment and stated that if posted to June 10, the company would not press for release of money till then. The company has briefed senior counsel Darius Khambata too to appear in the matter.
Vedanta alleged defects in project completion and expressed dissatisfaction with performance of SEPCO contractual obligation and thus invoked its bank guarantees. SEPCO challenged it.
Vacation judge Justice R K Deshpande placed the matter on June 9 for hearing after lawyers on both sides including Pravin Samdani counsel for SEPCO consented.
SEPCO III and Vedanta Ltd had entered into the power plant contract which is to be executed in two phases. The first phase is for 4×600 MW units and the second is for 2 x 600 MW units.
SEPCO III was awarded the contract for design, engineering, manufacture, supply, erection and project commissioning. There were four contracts.

The four contracts between SEPCO III and Vedanta Ltd for the coal based power plant in two phases near Jharsuguda on May 10, 2006 were for off Shore Supply Contract, a contract for Off Shore Engineering and Technical Services, another one for onshore Supply Contract and the last one for on Shore Services and Construction Contract. For the project execution Bank Guarantees were provided to Vedanta at the instance of SEPCO with an expiry date of March 31, 2015. The guarantees ranged from $1.5 million to $20 million

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http://timesofindia.indiatimes.com/city/mumbai/SEPCO-III-takes-Vedanta-to-court-over-guarantee-invocation/articleshow/47564100.cms

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