The Children?s Investment Fund (TCI) has vowed to continue its legal fight with the Indian government on the issue of mismanagement of Coal India (CIL) even as it met with policymakers on Tuesday. The second-largest shareholder in CIL has said that it would file a petition in India in July when the courts open after the summer vacation. This will be in addition to the arbitration proceedings that it has initiated under the bilateral trade agreement signed between India and Cyprus.
?We will continue our legal proceedings under BIT (bilateral investment treaty) and file a legal case against CIL in the Indian courts as soon as they open in July after the summer break,? said Oscar Veldhuijzen, partner, TCI, in an email response to The Financial Express.
Interestingly, this comes just hours after the coal secretary said that the issue can be resolved without resorting to any arbitration processes. Speaking to reporters in New Delhi after the meeting, coal secretary Alok Petri said that ?The matter can be resolved amicably and without an arbitration.?
TCI has already sent a formal notice to the government under the terms of the trade promotion treaty signed between India and Cyprus. On May 16, it said that if a settlement is not reached within six months, then arbitration proceedings in accordance with Article 9 of the Treaty would be initiated. Meanwhile, officials have said that TCI representatives raised issues during the meeting mainly related to pricing of coal, improvement of washeries and the alleged mismanagement of the mining firm that was listed on the bourses in 2010. ?I have told TCI if they have any issues, they can send us representation. In case of commercial issues like pricing, they should talk to Coal India,? said Petri.
According to Veldhuijzen, during the meeting the coal ministry acknowledged the fact that the government is ?interfering in FSA negotiations? but did not indicate ?how it intends to repair the damages that it has caused by interfering in coal pricing earlier this year.?
?MoC (ministry of coal) agreed that CIL is free to set coal prices and MoC is committed to coal washing, however it is not clear how the government will encourage, incentivise and facilitate coal washing,? he said.
In the numerous letters written to the board of CIL along with officials of ministry of finance and ministry of Coal, TCI has alleged that it was wrong on part of the government to direct CIL to sell coal under FSA at a discount of up to 70% compared to the international prices.
CIL shares rose 2.14% to R 321.80 on Tuesday.
