Liquidator of EPC Constructions to initiate arbitration against IOCL

National Company Law Tribunal (NCLT) has permitted the liquidator of EPC Constructions India Limited to begin arbitration proceedings against Indian Oil Corporation Limited (IOCL) to recover around Rs 1,005 crore in dues, which relate to work that EPC Constructions had carried out for the Paradip refinery project under a turnkey contract in 2011.

The liquidator sought National Company Law Tribunal (NCLT), Mumbai approval before initiating the arbitration proceedings against IOCL.

Justice P N Deshmukh and a technical member, Shyam Babu Gautam, said that EPC is undergoing a liquidation process, the outstanding amount will be beneficial to the liquidation estate. The recovery of Rs 1,005 crore is an asset of EPC as it is a part of the liquidation estate and cannot be left out of the liquidation estate.

EPC has a liability of more than Rs 11,000 crore towards its creditors. NCLT had acknowledged the company for the liquidation process on 7 May 2021, after the lenders were unable to receive any viable revival plan.

Moreover, the tribunal has also allowed the liquidator to initiate proceedings against Matix Fertilizers and Chemicals Limited to recover nearly Rs 310 crore for some off-shore and on-shore contracts that EPC Constructions India had undertaken back in 2010.

Pooja Tidke, a senior partner at Parinam Law Associates, said that the liquidators must effectively pursue sustainable claims against the debtors to maximise their asset value and direct it as a going concern.

She added that liquidators face constraints in deploying resources to seek large litigations, but litigation financing can be helpful to remove any constraints.

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