In a significant legal ruling on Friday, the Calcutta High Court issued an injunction preventing the West Bengal government and the West Bengal Industrial Development Corporation Limited (WBIDC) from disposing of any immovable assets within the Kolkata Municipal Corporation limits. This decision comes as part of the ongoing arbitration proceedings related to Haldia Petrochemicals Ltd (HPL).
The injunction specifically targets the government’s ability to sell, transfer, or assign its properties, reflecting the court’s intervention in a complex dispute involving substantial financial claims by Essex Development Investments (Mauritius) Limited. The Mauritius-based entity is executing part of an arbitration award where it seeks over Rs 2171.87 crore owed to HPL.
Justice Shampa Sarkar, presiding over the matter, also specifically restrained WBIDC from alienating its office premises located at 23 Camac Street in Kolkata. In a further step to secure potential assets for award satisfaction, the court has ordered principal officers of the award debtors to submit detailed affidavits listing their assets within two weeks.
This interim order remains effective until February 28, 2025, with the case scheduled for another hearing on January 3, 2025. The urgency and gravity of the court’s order underscore the stakes involved in the arbitration, which has seen the Supreme Court refuse to entertain an appeal from the West Bengal government against the arbitral award on November 11.
The root of the dispute lies in the non-payment of assured tax incentives to Essex, following its acquisition of the state government’s shares in HPL. This transaction was part of a strategy by The Chatterjee Group to revitalize HPL’s operations, which they took over in March 2014. Despite provisions in the share purchase agreement to continue tax incentives even after the GST regime’s onset on July 1, 2017, these payments were halted, prompting Essex to initiate arbitration for recovering the promised benefits.
