Deepak Fertilizers gains 4% after arbitration tribunal rejects claim of Rs 357 cr by GAIL
Deepak Fertilizers and Petrochemicals Corporation shares gained 4 percent intraday Friday after the arbitration tribunal has rejected GAIL’s claim of Rs 357 crore against the company.
The Gas Authority of India (GAIL) had claimed the amount in respect of supply of domestic natural gas for period July 2006-May 2014, alleging usage for manufacture of products other than urea.
While clarifying its stance, Deepak Fertilizers said as per two contracts entered into 2006 and 2010 between the company and GAIL, the purchase of gas was contractually and clearly intended, supplied and utilised for industrial applications.
It further said as per industrial license, utilisation of gas since the company’s inception was for its integrated NPK fertiliser complex. The company was never engaged in the manufacture of urea despite which the dispute was referred to arbitration, it added.
Accepting the company’s stand, the Arbitration Tribunal had earlier rejected the claim under 2006 contract amounting to Rs 244 crore.
“The final award in the arbitration proceedings is received now and the entire claim of Rs 357 crore by GAIL is rejected for want of merits, besides being time barred,” Deepak Fertilizers said.
At 14:26 hours IST, the stock price was quoting at Rs 398.00, up Rs 10.60, or 2.74 percent on the BSE.