Following a meeting with The Children’s Investment Fund, the Coal Ministry on Tuesday said there was no need for any arbitration with the hedge fund on violation of Bilateral Investment Protection Agreement (BIPA) in Coal India.
“Issues can be sorted out amicably. We have discussed with them the issues and also asked them further presentations if they have any issue,” reports said quoting Coal Secretary Alok Perti.
The Coal Ministry had said earlier that it would meet TCI, the minority shareholder in Coal India, this week. The fund had threatened legal action against CIL on various counts.
TCI is the second largest shareholder in Coal India after the government and has investments in CIL through TCI Cyprus Holding Ltd and Talos Capital Ltd, which is registered in Ireland.
TCI has been irked with the government and says its “recent conduct with respect to CIL has seriously impaired business activities and operations of CIL,” reports said earlier.
Earlier reports stated that TCI was against the move of the Government to make Coal India sign fuel supply agreements (FSAs) with private power producers to supply coal to them at subsidized rates and guaranteeing to supply 80% of contracted quantity.
The fund is angry about the reversal in prices Coal India adopted ‘blindly’ following the Government’s directive, which was a breach of its fiduciary duties towards shareholders.
The hedge fund had also requested for formal negotiations with Indian government on the issue for amicable settlement of the claims under the respective treaties.
“Failing such settlements within six months, we reserve our rights to initiate arbitration” in accordance with Cyprus and UK treaties, TCI had said.
“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,” reports said quoting Perti.