Indias largest diversified engineering and construction company Larsen & Toubro (L&T) has filed for arbitration proceedings against cement maker Zuari Cement,a fully-owned subsidiary of Italian cement major Italcementi Group,to claim Rs 188.53 crore in unpaid bills and payment delays,two people with direct knowledge of the development said.
They havent paid us for the Rs 269.74 crore civil construction work to build a cement plant in Yerraguntla,Andhra Pradesh,and we have started arbitration proceedings against them, K Jagannathan,legal head at L&Ts engineering and construction division,said. They encashed our Rs 15.80 crore performance guarantees in spite of their dues to us.
I cannot comment, Zuari Cement MD Maurizio Caneppele said.
A three-member arbitration panel will hear the case,presided by BP Singh,a former Supreme Court judge,with Arvind V Savant,retired chief justice of Kerala High Court appearing for L&T and JK Mehra,a retired high court judge representing Zuari. L&T ECC is represented by Mumbai-based Hiroo Advani & Co and Italicementi by Amarchand & Mangaldas & Suresh A Shroff & Co.
The arbitration may continue for a year for the final verdict, a second person with direct knowledge of the development said.
L&T ECC took Zuari Cement to court after it failed to repay Rs 31.53 crore outstanding dues to build a 5,500 tonne a day cement plant. The rest of the claim is for penalties for delays and encashing the guarantee.