ArcelorMittal seeks payment from Liberty Steel

Luxembourg-based steel producer ArcelorMittal has filed motions in at least two jurisdictions seeking to force United Kingdom-based fellow steelmaker Liberty House Group to pay a 140 million euros ($148.4 million) judgment that went against Liberty earlier this year.

The filings are tied to a ruling in London this January, where a court there found in favor of ArcelorMittal on a late payment claim it made tied to ArcelorMittal’s 2019 sale of steel mills in the Czech Republic, Italy, Macedonia and Romania to the Liberty Steel business unit.

A 16-page filing dated Oct. 24, that was obtained by Recycling Today was made by ArcelorMittal’s United Kingdom-based law firm in a United States district court in Atlanta, where the law firm has an office.

According to that document, “Liberty has not paid any part of the award” from January, attorney Charity R. Kirby of U.K.-based King & Spalding LLP says. “To date, Liberty has still not produced any audited, consolidated financial statements to ArcelorMittal.”

Regarding the U.S. connection, Kirby says an order issued by High Court of Justice of England and Wales (EWHC) means that court can freeze assets outside of the U.K. in a worldwide freezing order if the company owing money does not have sufficient assets in the U.K.

Liberty operates nine sites in the U.K., including several melt shops. While those assets would seem to be sufficient to satisfy the claim, Kirby writes, “Based on information available to ArcelorMittal, Liberty’s assets in the U.K. not subject to attachment by other creditors fall far short of the amount Liberty owes in the award.”

In the U.S., Liberty operates a steel rolling mill (with an idled melt shop) about 350 miles from Atlanta and an electric arc furnace (EAF) mill and related facilities in and near Peoria, Illinois.

The U.S. petition also refers to a second legal filing made earlier in Singapore. While Liberty House does not operate industrial sites in Singapore, Kirby implies Liberty affiliates within its parent company  GFG Alliance or perhaps GFG’s founder and board chair Sanjeev Gupta may have liquid assets in the financial hub.

“It is my understanding that the Singapore High Court has discretion to grant a domestic [asset] freezing conjunction” under certain circumstance, Kirby says. “The Singapore High Court may also consider [the] nature and location of any assets, dishonest or fraudulent conduct on a large scale [and] the ability to hide assets behind complex corporate structures in jurisdictions where enforcement of judgements is difficult.”

In her U.S. motion, Kirby also narrates the GFG Alliance relationship with its former financier Greensill Capital. That Europe-based firm collapsed in 2021, followed by a U.K. Serious Fraud Office (SFO) investigation into GFG announced later the same year.

“The Liberty Holding Group’s true financial health is impossible to verify," Kirby says.

Kirby quotes an accountant hired by the U.K. Parliament as saying no auditor to his knowledge had a “complete picture” of how Liberty or GFG “is performing,” adding GFG hired different auditors for many of its different business units and changed auditors regularly.

“Based on these facts and further details provided by ArcelorMittal, the Singapore High Court concluded there is a real risk of dissipation of Liberty’s assets in connection with ArcelorMittal’s application for [an] injunction," Kirby writes in her motion to the court.

After spelling out what Kirby portrays as an unclear picture of Liberty Steel, the solicitor closes by saying the case calls for a Section 1782 discovery process in the U.S. pertaining to the case.

Global law firm Quinn Emanuel says Section 1782 of Title 28 of the U.S. legal code allows an "interested party" to a foreign proceeding to seek U.S.-style discovery from a person or entity located in the United States.

Kirby also indicates in her U.S. filing that Liberty Holding Group has been seeking deadline extensions in the Singapore High Court in what the lawyer describes as another example of Liberty’s strenuous efforts to date to hide its finances from ArcelorMittal and prevent ArcelorMittal from being made whole.