CHENNAI, Aug 12: The Chennai high court has allowed Spic to file an application seeking suspension of an order passed by a division bench on March 18 this year, until the Supreme Court takes up the Arochem case.

Arochem is a Spic-MRL joint venture firm. The permission was granted by the division bench comprising justices NV Balasubramanian and KA Thanikkachalam here on Tuesday following a request to this effect by senior counsel for Spic Nalini Chidambaram. Spic would file the application on Wednesday.

Chidambaram sought the court's approval for the application while making submissions on a review petition filed by Spic against the bench's order in the Arochem case.

In its order, the bench had restrained two Spic companies - Spic Petrochemicals Ltd (SPC) and Spic Aromatics and Chemicals Corporation Ltd (SACL) - from proceeding further with their projects, which were competitive in nature to Arochem. The bench also restrained the two companies from creating any third-party interests.

The two-judge division bench on Monday had come up with a split verdict on the review petition as Balasubramanian rejected the petition. However, Thanikkachalam was in favour of allowing the review application, while keeping the earlier interim injunctions in abeyance, subject to fulfillment of certain conditions.

The bench was expected to take a final decision on the petition, either to reject it or refer it to a third judge. Emphasising the need to suspend the earlier order on Tuesday, Nalini Chidambaram accepted that there was no necessity for a third judge. She also sought clarification on `third-party interests' in the bench's earlier order.

According to her, equipment worth Rs 288 crore had already landed at the site and was in the bonded warehouse. However, the company was unable to furnish bank guarantees as the banks were unwilling to provide guarantees without security. The court order prohibited the company from giving any security, she said.

According to her, owing to the order, the marine and transit insurance had to be extended with additional costs. Chidambaram pointed out that the time and cost overruns would make the project unviable ultimately. She prayed that the order on the creation of third-party interests should be restricted to the issue of equity shares to take care of MRL interests.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.