The Hindu : Business : Bechtel wins order to attach DPC shares

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Thursday, Jun 02, 2005

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Business

Bechtel wins order to attach DPC shares

Special Correspondent

MUMBAI: The on-going battle over the Dabhol Power Company (DPC) and its closed 2,184 MW plant in Maharashtra entered a new phase on Wednesday with an affiliate of the multinational Bechtel Corporation announcing that it had the right to seize the assets of the Maharashtra Power Development Corporation Ltd (MPDCL), a wholly owned subsidiary of the Maharashtra State Electricity Board. While Bechtel and General Electric own 85 per cent of the shares in DPC, MPDCL holds 14.6 per cent.

This follows the order given by the ICC International Court of Arbitration in Paris on April 27, awarding $123 million in damages in the on-going dispute between the company and MPDCL over the violation of shareholder rights. The latter was given a month to settle the matter. When there was no response from India to the May 27 deadline, Bechtel moved the court of the U.S. District Judge Lewis Kaplan in the Southern District of New York who signed an order directing the attachment of MPDCL's shares in DPC.

Although the MSEB refrained from commenting because the matter is sub-judice, sources confirmed that on May 30, the MSEB went to the Bombay High Court and was granted an injunction restraining Bechtel from taking any steps in furtherance of the award of April 27 by the ICC International Court of Arbitration. The court observed that Bechtel going to the arbitration court, the arbitral proceedings and the award of the arbitrators were in defiance of the orders passed by the Division Bench of the Bombay High Court on September 24, 2003, September 25, 2003 and October 6, 2003 as well as the order of a single judge passed on January 22, 2004 relating to the validity of such arbitration proceedings while the matter was still being heard by the Supreme Court.

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