Steel firm takes legal action in attempt to force reversal of decision that could force UK plant closure

Steel company Corus is launching a legal action against a group of foreign executives for allegedly cancelling a deal that puts its Teesside plant at risk of closure, according to a report in the Mail on Sunday.

The paper said that lawyers for the Anglo-Dutch firm are seeking to force a consortium of four firms to reverse a decision to abandon a 10-year agreement to buy stock from the Redcar plant.

The firms are the Marcegaglia lead company, South Korea's Dongkuk Steel Mill Company and Luxembourg-owned Alvory and Duferco. A spokesman for the group told the newspaper that it would not engage in talks with Corus until the action was withdrawn.

Steel
A 10-year agreement to buy stock from the Redcar plant has been abandoned

He said: 鈥淎lthough it has no obligation to do so, the group has opened the door to new discussions. But the aggressive litigation initiated by Corus remains a block to these talks starting.

鈥淭here is no appetite to sit across the table from a loaded gun. All Corus needs to do is to suspend its litigation against the consortium members.鈥

Corus said the consortium had failed to honour a long-term agreement that was 鈥渃rucial鈥 to its operations in the North-east of the UK.

A spokesman said: 鈥淭he consortium's failure to meet its contractual obligations automatically triggers arbitration.鈥