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Informist, Thursday, Jan. 29, 2026

 

NEW DELHI – Vedanta Ltd. Thursday moved the division bench of the Delhi High Court against a 2011 arbitral award that declared the shareholders' agreement signed between the company and the government on the transfer of shares of Bharat Aluminium Co. Ltd. as void. Under the agreement, after a three-year lock-in period, Vedanta could request the government to sell the remaining 49% shares held by the latter in BALCO to the company at a mutually agreed price, pursuant to which the Centre was obligated to sell those shares.

 

The government opposed Vedanta's petition and said that INR 100 billion to INR 150 billion were at stake in the present dispute. The government said that Vedanta's petition was filed beyond the 60-day limitation period against a single-judge bench's Oct. 8, 2025, order. The high court will hear the case next on Feb. 13. 

 

The case has its genesis in the government's decision to disinvest a stake in Bharat Aluminium Co., for which Sterlite Industries India Ltd. was the successful bidder. Sterlite Industries later changed its name to Vedanta.

 

Thereafter, two agreements were entered into between the government and Vedanta. A share purchase agreement between them stated that Vedanta acquired 51% stake in Bharat Aluminium Co. The shareholders' agreement provided that, upon expiry of three years, the government could exercise various options to transfer the remaining shares of Bharat Aluminium Co.

 

After the expiry of the three-year period, Vedanta issued a notice calling upon the government to sell the remaining 49% shares of Bharat Aluminium Co. under the call option in the shareholders' agreement. However, in 2006, the government took a stand that the clause stipulating the option given to Vedanta to issue a notice for purchasing the shares and that the Centre being bound to sell the shares was "in teeth of Section 111A(2) of the Companies Act" and hence is null, void and unenforceable.

 

Following a dispute, Vedanta invoked arbitration. In 2011, the arbitral award held that various clauses of the shareholders' agreement imposed multiple layers of restrictions, rendering the sale of the government's shares to a third party impracticable. There is a clear bias in favour of Vedanta for becoming the full owner of Bharat Aluminium Co., ultimately, and there was no way around selling the shares to any other party, the award said. It said that the government was being forced to sell the shares only to Vedanta and to no one else, which was clearly in contravention of Section 111A(2) of the Companies Act, 1956, which mandates free transferability of shares.

 

Challenging the arbitral award, Vedanta moved the single-judge bench of the high court. "Whether the agreement entered into between the two shareholders of BALCO evades a public right or not, the (arbitral) tribunal has taken a view that it is plausible and this court while dealing with the petition filed under Section 34 of the Arbitration and Conciliation Act, cannot interfere with the award unless it is so capricious or fallacious warranting interference under Section 34 of the Arbitration and Conciliation Act, 1996," the single judge bench of Justice Subramonium Prasad said on Oct. 8, 2025. Challenging the single-judge bench's order, Vedanta moved the division bench of the court.

 

Thursday, Vedanta's shares ended 4.0% higher at INR 766.35 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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