Mumbai: The Bombay high court on Tuesday asked Oil and Natural Gas Corp. Ltd (ONGC) to release nearly $20 million to Singapore-based Swiber Holdings Ltd, an oilfield services provider.
Swiber, which is working on three projects for the state-run energy explorer, had filed for liquidation in July. Worried that Swiber would not be able to complete its work, ONGC in August invoked bank guarantees totaling $105 million.
However, Swiber withdrew its liquidation plea and was placed under judicial management, which helps companies restructure their businesses.
In an interim order, judges V.M. Kanade and Swapna S. Joshi ordered ONGC to release $11.1 million to the judicial manager of Swiber and deposit $8.44 million with the Bombay high court. “We direct ONGC to release $11.1 million to the judicial manager, subject to a workable mechanism, so that this amount is utilized for the purpose of this project only. Apart from the release amount, $8.44 million will be deposited in this court by ONGC. This money is being released on a statement made by Swiber that this amount is sufficient for the purpose of starting the project.”
“The intent is that the money which is released by ONGC and goes to the judicial manager, will be used only for the purpose of the benefit of the project and will not be used otherwise,” said Nishit Dhruva, managing partner at law firm MDP Partners, which is representing ONGC in the matter. Dhruva added that the total payout is going to be $320 million, of which the first tranche has to be released as per the order.
“Once the dispute between Swiber and the sub-contractors are settled, then the balance amount will be released by ONGC in tranches,” he said.