Anrak Aluminium’s insolvency petition rejected by NCLT Hyderabad bench

The National Company Law Tribunal (NCLT) of India has decided to reject the insolvency petition filed by Anrak Aluminium, The company and the lenders had pleaded for liquidation claiming to have explored all the available options. But NCLT Hyderabad bench advised them to approach government agencies for resolution of the issue before initiating any insolvency proceedings. The regulatory body took the rare decision saying it was in the ‘interest of the nation.’

Anrak Aluminium, a joint venture between India's Penna Cement and Ras Al Khaimah Investment Authority (RAKIA), had moved NCLT after RAKIA served an arbitration notice on the Indian government and the State Government of Andhra Pradesh, seeking fulfilment of bauxite supply commitment or pay damages on its investment of US$44.71 million in the venture; but AP government declined bauxite supply for Anrak’s alumina refinery.

Prior to that Anrak had requested Government of Odisha to find out a possible solution to its bauxite supply uncertainty issue that has been making its alumina refinery unit at Makavarapalem, Andhra Pradesh starve since inception.

The Penna Cement-RAKIA JV had completed construction of its 1.5-million tonnes-per annum aluminium project by March 2015, but could not commence operations owing to controversies over bauxite mining in the areas of Jerrala deposits, known for their tribal settlements.

The NCLT bench has observed that both the company and the lenders have "failed to produce any documents to prove that they have taken uppursuing with the state government APMDC in the matter of revoking the cancellation of bauxite supply agreement."