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  5. Voltas shares slip over 2% amid legal woes in Qatar

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Voltas shares slip over 2% amid legal woes in Qatar

Upstox
By Upstox News Desk

3 min read | Updated on February 07, 2025, 13:29 IST

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SUMMARY

Voltas stocks were down 2.2% on the NSE on Friday after the Investment and Trade Court of Qatar ordered the company to pay QAR 167.72 million (or about ₹402 crore). The litigation started on August 14, 2023, when Voltas filed a case against the joint venture of OHLC for non-payment for work done, project variations and delays, for QAR 771.632 million (approximately ₹1,754.69 crore).

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The litigation started on August 14, 2023, when Voltas filed a case against the joint venture of OHLC for non-payment for work done, project variations and delays, totalling up to QAR 771.632 million. | Image: Shutterstock.

The litigation started on August 14, 2023, when Voltas filed a case against the joint venture of OHLC for non-payment for work done, project variations and delays, totalling up to QAR 771.632 million. | Image: Shutterstock.

Shares of Voltas slumped 2.2% to their intraday low of ₹1,322 apiece on the National Stock Exchange (NSE) on Friday, February 7 after the company revealed that it suffered a major blow in an ongoing material litigation in Qatar.

The Investment and Trade Court, in Doha, Qatar ordered the company to pay QAR 167.72 million (or about ₹402 crore) to OHL International, Spain, and Contrack (Cyprus) Ltd (OHLC), Voltas said in a regulatory filing dated February 6.

The litigation started on August 14, 2023, when Voltas filed a case against the joint venture of OHLC for non-payment for work done, project variations and delays, totalling up to QAR 771.632 million (approximately ₹1,754.69 crore). In response, on October 1, 2024, OHLC filed a counterclaim against the Tata-led company demanding ₹7,384.83 crore, including ₹6,409 crore in damages. Voltas has contested these claims.

Moreover, OHLC sent notices to the bank for the encashment of two bank guarantees of QAR 166.720 million (or ₹373 crore) issued by Voltas as per the sub-contract. When the bank did not make the payment, OHLC took legal action against the bank.

However, on September 29, 2024, the court held that OHLC lacked legal capacity in Qatar to file a lawsuit, the case filed by both Voltas and OHLC, comprising the claim, the counter-claim, and OHLC’s suit against the bank was therefore dismissed, Voltas said.

Nevertheless, all the parties involved in the case contested the dismissal order. Following this, the Qatar court recently ordered the bank to pay OHLC “QAR 166.720 million towards the encashment of bank guarantees of Voltas together with compensation of QAR 1 million,” the company said in a statement to the bourses.

The claims raised by Voltas for QAR 771.632 million (approximately ₹1,754.69 crore) were rejected because it had been “overpaid, after considering the cost of repairs”. Furthermore, OHLC’s counter-claim was also rejected.

“As there are certain anomalies in the Court Order, the company (Voltas) is in discussion with local lawyers to challenge the Order by filing an appeal in the Court of Appeal,” it added.

"Unprecedented things are happening in that area, especially in Qatar, wherein, unfortunately, our dues are not being paid to us timely, and inordinate delays are happening. We have completed the project and handed it over, and despite that, payments are not made," Pradeep Bakshi, the MD and CEO of Voltas told PTI in February 2024.
“There has to be some basic ethics when you do business with your partners... Unfortunately, our payments are not coming. The total gross outstanding is close to ₹750 crore. There is an additional exposure of ₹375 core in bank guarantees," Bakshi had said, according to PTI.

Stock reaction

At around 12:14 pm, the scrip pared the losses with gains as it was trading at ₹1,375.7 per share price, up 1.78% on the NSE on Friday.

Voltas shares gained 1.41% in the past five days but lost 23.70% over the last month. The stock slipped 7.62% over the past six months and 25.68% on a year-to-date basis.

Voltas has a total market cap of ₹45,169.08 crore as of February 7, 2025, on the NSE.

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