New Delhi, Aug 23 :
Jindal Steel and Power arm, Jindal Steel Bolivia has won a more than $22.5 million arbitration judgement against the south American country’s state-run mining company Empresa Siderurgica del Mutun (ESM).
“Jindal Steel Bolivia, an entity of leading international company Jindal Steel & Power Ltd. (JSPL), has been vindicated in connection with its investment in the ‘El MutAn’ project in Bolivia by an international tribunal ordering payment to Jindal of more than $22.5 million by Bolivian state-owned entity Empresa SiderArgica del Mutun (ESM),” JSPL said in a statement Saturday.
“Jindal has been one of the foreign investors impacted by anti-investor policies and conduct by Bolivia in recent years. Jindal’s investment in Bolivia related to El MutAn, a deposit of approximately 40 billion tons of iron ore in eastern Bolivia near Brazil and Paraguay,” the statement said.
“Jindal entered into a 2007 joint venture contract with the Bolivian State, ESM, and another state entity, COMIBOL, to develop and exploit El MutAn. Jindal invested tens of millions of dollars in the project, including providing US$ 18 million in project guarantees,” it added.
Jindal commenced arbitration before the International Chamber of Commerce (ICC) in Paris and sought recovery of $18 million principal, plus interest, related to the illegal encashment of the bank guarantees.
“In an award dated Aug 6, the ICC Tribunal agreed, granting principal plus interest for a total in excess of $22.5 million,” the statement said.
The tribunal ruled that there was “more than sufficient evidence to establish that ESM did not comply with the obligation to deliver the lands” and this suspended Jindal’s obligations under the contract, said the Jindal statment.
Jindal has now commenced a second ICC arbitration related to the project, focused among other things on damages arising out of the termination of the MutAn contract. “Jindal is seeking damages approaching approximately $100 million. The case is pending,” it added.