ONGC seeks SC's permission to encash Rs 3.5 cr bank guarantee | business | Hindustan Times
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ONGC seeks SC's permission to encash Rs 3.5 cr bank guarantee

State-owned ONGC has sought the Supreme Court's permission to encash Rs 3.5 crore bank guarantee furnished by Garware Shipping Corporation in a matter related to repairs and maintenance of the oil exploration major's offshore vessels.

business Updated: Sep 29, 2009 21:02 IST

State-owned ONGC has sought the Supreme Court's permission to encash Rs 3.5 crore bank guarantee furnished by Garware Shipping Corporation in a matter related to repairs and maintenance of the oil exploration major's offshore vessels.

A bench headed by Justice S H Kapadia asked Garware Shipping Corporation Ltd (GSCL) counsel Prashant Bhushan to seek instructions in this regard.

Additional Solicitor General Gourab Banerji, appearing for ONGC, asked the apex court to allow the oil company to encash the bank guarantee of Rs 3.5 crore furnished by GSCL.

He also said that GSCL's curative plea has also been dismissed by the apex court recently.

GSCL had acquired and handed over some offshore vessels (OSVs) to the oil company during November 1983 to March 1984, a dispute arose between the parties regarding the method to be adopted for calculating the cost of repairs and maintenance of OSVs for the eleventh to the sixteenth year of their operations, ONGC said in its application.

As per the arbitration clause, the disputes were refereed to a sole arbitrator which passed an award in April 2004 in favour of GSCL and held that for computation of repairs and maintenance expenses, it was necessary to take into consideration the years of the operations and not the calender years.