Supreme Court Orders Nalco To Sell Alumina To Vedanta

Supreme Court Orders Nalco To Sell Alumina To Vedanta

India’s National Aluminium Company (NALCO) was ordered by the country’s Supreme Court to deliver 30 thousand metric tons of metallurgical-grade calcined alumina to the Vedanta plant at Visakhapatnam, which Vedanta will ultimately use at its SEZ unit in Jharsuguda.

To date, Nalco has been unwilling to ship its rival alumina from the supplies set aside for overseas sale, as it contends that London-based Vedanta is de facto a domestic firm. Nalco has thus far refused supplying alumina to Vedanta’s special economic zone (SEZ), preferring instead to end the contract at Visakhapatnam Port.

In addition to declining to ship alumina to Vedanta’s SEZ, Nalco has also required a Let Export Order (LET) from customs officials at the port. In a previous order, the Indian Supreme Court instructed Nalco to obtain such documentation from the SEZ authorities instead.

Vedanta’s senior counsel Mukul Rohtagi also asked the court to keep pending the contempt petition due to his contention that Nalco is unlikely to stick to the court’s order. Rohtagi said it was more than clear to him that Nalco would much prefer to sell alumina to Vedanta’s competition.

Justices had harsh words for Nalco, which they delivered to the firm’s senior counsel SK Bagaria at the hearing last week.

“If they (Vedanta) are otherwise eligible, then you (Nalco) must not discriminate. You better comply with our order. You are unnecessarily creating problems. You should allow, otherwise we will haul you for contempt. We are disappointed with your client…”

Nalco’s top brass were virtually present at the hearing, as the Court demanded answers from its highest levels regarding its failure to comply with the previous order. Nalco’s executive director of marketing R N Mohapatra defended the firm against a contempt order, which the Court was considering due to Nalco’s “clear deviation from the requirement recorded in it January 14 judgment.”

According to the contempt petition, Nalco “purposely and wilfully trying to circumvent the SC’s directions… The judgment is pending compliance since seven months and this is indicative of the lackadaisical and tardy manner in which the transaction has been carried on especially with the intent to frustrate the mandate of the SC.”