Published On:October 27 2021
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Tata Projects, Veritas in spat over chemical terminal project in UAE.

Tata Projects has been dragged into a $645-million spat with Mumbai-based Veritas Group over a terminal plant built in the UAE for trading, distribution and manufacturing of petrochemicals.

Veritas has claimed that Tata Projects has delayed the completion of building the chemical storage tanks, for which it was given a two-year extension.

But sources close to Tata Projects told BusinessLine that Veritas, which has a group company named Hazel International, had lost an arbitration proceeding in West Asia involving the same dispute following which their properties too were attached.

In 2014, Hazel International had roped in Tata Consulting Engineers and Tata Projects to construct a Chemical Terminal and Process Plant in two phasesat a cost of $65,000,000. The project was signed in July 2014 and was to be completed in 2016.

In 2018, Groupe Veritas and its subsidiaries, Hazel International and Veritas India, filed a legal petition against Tata Projects with a series of allegations, including delay of the project, fraud/irregularities in invoices, defect and deficiencies.

Tata Projects, on the other hand, initiated arbitration against Hazel International in Mumbai. According to the arbitration proceedings, it cannot be disputed that as per the terms of the contract Tata Projects was required to complete the contractual work within two years, but had to be given two extensions of one year each.

While Veritas has claimed that the project is still incomplete, a source close to the Tata camp said that the site has been operational for two years.

Sources close to Tata Projects further said that after Hazel International’s terminals too were attached in West Asia after it lost the arbitration proceedings, and more than ₹200 crore is due to them from the company.

In the annual general meeting of Veritas in Mumbai last month, a shareholder raised the issue of contingent liabilities.

The company replied that the project was delayed by over two years by Tata Projects, and the performance bank guarantee was encashed by it and the group has filed appropriate counterclaims to safeguard its interest.

Replying to an email query from Business Line, Tata Projects said: “This company was earlier known as Hazel International, now known as Verasco. Tata Projects has built a world-class terminal project, where large payments are overdue. To recover this amount, as per the contractual provisions, Tata Projects is in arbitration process.”

HBL





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