Niko fights on in case against Gujarat Petroleum

Vol 5, PW 4 (11 Apr 01) People & Policy

We spoke too soon.

In the last issue of Petrowatch we reported that the acrimonious court dispute between Niko Resources of Canada and Gujarat Petroleum had ended. Unfortunately it hasn't - and the dispute looks like it might drag on for some weeks yet.

Legal sources in Delhi tell Petrowatch that on Saturday 31st March Niko filed an appeal against a High Court judgment, delivered on 8th March by Justice S.K Mahajan before the Delhi High Court.

In his 36-page judgement, Justice Mahajan rejected Niko's plea to refer the matter to arbitration, and supported Gujarat Petroleum's decision to transfer the disputed 14-km Hazira-Mora gas pipeline to Gujarat State Petronet, which is overseeing construction of a 1,507-km gas grid. Niko disagrees with Justice Mahajan's view and appears set to fight on.

We learn the company wants the case to be heard before a division bench of two judges. "Niko is challenging the order on all conceivable grounds," a lawyer in the case tells Petrowatch.

Niko's decision to fight is bad news for companies seeking an equity stake in Gujarat State Petronet: Shell, Gaz de France and British Gas. All three are scheduled in Gandhinagar for a final round of talks on the shareholder agreement.

With Niko's decision to appeal, agreement might take longer than expected.