What happens to subcontractors liability contract terminated
My company is subcontractor to a Russian Company for Metro Rail. The Russian company officials one fine day vanished and our company with about 100 other subcontractors & suppliers are left in lurch. The Metro Corp terminated the contract & en-cashed the bank guarantee and has held back payments. How can we recover our money ? Is the Metro Rail Corp responsible for our certified payments as a principle employer ? How do we get our money from a Russian Company which has abandoned & ran away from a project ? We also have confirmed reports that the company has about Rs.7.00 Crores in a foreign Bank In India ? How can we secure that money ?
Asked in Business Law from Pune, Maharashtra
We have all made an association and have been protesting before the Metro Rail Corp office & have met them and the Russian Embassy officials. No one is giving proper replies. They are not releasing our equipment & machines saying that they have been seized though we have produced evidence of ownership & finance from NBFC's & Banks. What can we do to recover our monies & machines ?
Asked 1 year ago
1) issue legal notice to russian company for recovery of your dues
2) if it fails to pay file suit for recovery of your dues.
3) also in said suit seek attachment of money lying in foreign bank in india as you apprehend that company will transfer funds abroad
Remember one thing. All you are a sub-contractors. Whether main contract agreement executed in between Metro Company and Russian Company is permitting sub-contracts. If so, upto what extent? Unless we see the contract and sub contract agreements it is not suggestible to answer your query. Better you approach any advocate (with all relevant papers) of your near who is having much exposure in company law.
1) it is necessary to peruse your contract with the Russian company . and metro rail corporation contract with Russian company
2)if your machines have been financed by NBFC if you stop paying installments NBFC will file suit to recover the machines from metro rail corp
1. The agreement executed between government and Russian firm is to be seen.
2. If there is clause in your support you can seek the relief flowing there from.
3. So in other words unless and until the said agreement is perused no effective advice can be given.
The Metro Rail is neither your principal employer nor you are an employee in any definition. In fact the metro rail has not entered into any contractual agreement with your company hence it has no liability with your company. All your claims lie with the Russian company alone.
You can approach court with an injunction petition for restraining the Metro Corp from disbursing any payment to the Russian contractor until your payments are made by the Russian company and also for release of your machinery seized or retained by the Metro company by producing the authentic and substantial evidences before court supporting your claim. Without a curt order the Metro Rail corp may not extend their cooperation or support your claim or even listen to you.
What is the opinion about the action plan of your own advocate?
1. Is there an arbitration clause in the agreement? If there is an arbitration clause then the doors of a civil court are closed for you. You have to seek arbitration. If there is no arbitration clause then you can sue the Russian Company in India unless there is an agreement to the contrary.
2. The Metro Rail Corp can also be made liable.
3. If your machinery has been seized then you can move the civil court to have it released.