The Supreme Court of India on Tuesday stayed the Bombay High Court's order that asked Vedanta Aluminium Ltd (VAL) to deposit a security amount of Rs 187 crore with the court till the settlement of the company's dispute with Chinese firm Shenzen Shandong Nuclear Power Construction Company (SSNPCC).

In 2008, VAL had signed an agreement with SSNPCC for establishing co-generation units on a turn-key basis. However, the Rs 1,200-crore project stuck because of lack of environmental clearance.

The Chinese power equipment maker then filed an arbitration plea to recover its dues from VAL, claiming that it had incurred massive losses because of stoppage of work at the Lanjigarh, Orissa-based alumina refinery.

The Bombay High Court directed billionaire Anil Agarwal-controlled VAL to deposit Rs 187 crore in security and also ordered the company not to sell, lease or create third-party rights on the asset for the same amount.

But an apex court bench headed by Justice AK Patnaik stayed the high court's order, saying that usually the court doesn't secure an amount in security that is yet to be adjudicated. In addition, the bench noted senior counsel AM Singhvi's argument that such directive on deposit of security was passed in extraordinary circumstances.

The apex court also gave the Chinese power equipment manufacturer four weeks' time to file its reply.