NEW DELHI, March 7 � The Delhi High Court today allowed the Centre to proceed with termination of its agreement in Amguri oil field in Assam with Canada-based oil and gas exploration and production company Canoro Resources, reports PTI.
A bench of Justice Vipin Sanghi today refused to grant relief to the Canadian firm that was issued show cause notice by the government on why the agreement should not be cancelled in view of the change in the management of the company after its� majority stake was sold out.
The bench, which had earlier restrained the Centre from taking any action, has vacated the stay and allowed the government to take appropriate decision.
The government had issued notice after the firm had transferred its majority stake to Barbados-based MASS Financial Corporation, which according to the centre was against the public interest and had caused irreparable damages to the oil field.
Dismissing the company plea, Justice Sanghi said, �I am of the prima facie view that the State, as a sovereign, cannot be understood to have irretrievably given up all its rights while entering into a contract, such that it is rendered helpless in a situation which threatens the national interest or security of State�.
�An interpretation, either of a law or a contract, which impinges on the sovereign power of the State to safeguard its vital and strategic interests (and not just commercial interests), would be eschewed by the Court to save the law, or the contract, from validity on the ground of it being opposed to public policy,� the court said.
The centre had issued a notice on June 1, 2010 to Canoro Resources saying that in the light of change in the status of the firm, its agreement with Canadian company shall be terminated.
In the show-cause notice, the government had stated that as per the agreement, the Canadian firm had to seek consent of the government in case of any material change in the status or shareholding of the company, which it had not done.
