GAIL Files $1.8 Billion Arbitration Claim Against SEFE Unit In London
The litigation stems from non-supply of LNG cargoes to GAIL under a long-term contract.
GAIL (India) Ltd. has filed claims worth $1.8 billion, or about Rs 15,000 crore, against SEFE Marketing & Trading Singapore in the London Court of International Arbitration.
The litigation is related to the non-supply of LNG cargoes to GAIL under a long-term contract, the company said in its exchange filing on Friday.
The quantum of claims is up to $1.8 billion and alternative reliefs include non-monetary reliefs, the public sector natural gas distributor said.
SEFE Marketing and Trading Singapore (erstwhile Gazprom Marketing and Trading Singapore) signed an agreement with GAIL to supply 2.5 million tonne of liquefied natural gas per annum for 20 years from FY19.
The long-term gas contract got disrupted in May 2022, following the Russia-Ukraine crisis. The supplies got hindered as the German government debarred the company from picking up any cargo from Russia.
"The force majeure alleged by the supplier was not as per the contract," Sandeep Kumar Gupta, chairperson and managing director of GAIL (India), told BQ Prime in an interview earlier. "It was a portfolio of contracts, and they should have supplied them by sourcing gas from other geographies."
There were around 40 cargoes that were to be supplied under the contract. The total disruption was 30 cargoes since May 2022, valued at $1.7 billion, or Rs 14,057 crore.
Gazprom Marketing and Trading Singapore was moved to Gazprom Germania, now called Sefe. But in early April last year, Gazprom gave up the ownership of the German unit without giving a reason and placed parts of it under Russian sanctions, according to a PTI report.
Shares of GAIL closed 3.15% higher at Rs 136.05 apiece on the NSE, compared to a 0.67% advance in the benchmark Nifty 50.