Essar Global Fund has sued the Minnesota Natural Resources and Administration departments, attempting to block the state's efforts to stop the Dubai-based firm from doing business in Minnesota.

Essar Global in January bought the debt of Mesabi Metallics, which has pledged to finish a $2.6 billion taconite project on the Iron Range that an Essar subsidiary abandoned in 2016 after missing several deadlines tied to its state aid and failing to pay millions to contractors.

The lawsuit, filed Feb. 20 in Ramsey County District Court, seeks a restraining order that would prevent the state from moving forward on a request from the Department of Natural Resources (DNR) to "debar" Essar from operating in Minnesota.

"Essar remains interested in the successful completion of the project," the lawsuit said, but the debarment petition could jeopardize it.

The company also claims that the Department of Administration (DOA) does not have the authority to debar Essar and that the DNR is infringing on Essar Global's rights to constitutional due process.

Jess Richards, assistant commissioner for the DNR, said the state plans to fight the litigation.

DOA officials on Wednesday declined to discuss Essar's lawsuit but said the department does have the authority to debar companies and has done so 26 times since 2016. Usually the reason was failure to pay workers, said Curtis Yoakum, an assistant commissioner of the DOA.

Because the DOA has yet to act on DNR's debarment request, Richards said Essar's lawsuit is premature.

"DNR is still in the process of reviewing Essar's complaint, but we are confident that the foundation for our debarment request is strong," he said. "We will evaluate all of our legal options to ensure the state is protected."

DNR Commissioner Sarah Strommen accused Essar of fraud in a Feb. 13 letter to the DOA asking for the debarment of Essar and Madhu Vuppuluri, who was CEO of Essar Steel Minnesota.

"The DNR and state of Minnesota have a long and troubled history in working with Essar, its affiliates and its principal Madhu Vuppuluri related to what is now called the Mesabi Metallics mining project near Nashwauk," Strommen wrote.

Over nearly a decade, Strommen wrote, Essar violated contracts, failed to meet its mining lease agreements and repeatedly failed to pay contractors, meet construction deadlines and repay the state and Itasca County for $64 million in infrastructure improvements costs.

After the state called due several economic development loans, Essar Steel Minnesota filed for bankruptcy in 2016, listing $1.1 billion in debt and leaving the taconite plant in Nashwauk only half-built.

A group of investors that bought Essar Steel's assets out of bankruptcy renamed the project Mesabi Metallics. The group was first led by Virginia health care entrepreneur Tom Clarke, who later sold his controlling interest to Nubai Global Investment, based in the British Virgin Islands.

In January, Essar Global announced that it had sold a coal business and used the proceeds to pay off $260 million in Mesabi Metallics debt. That essentially made Essar Global a key investor again in the Nashwauk project.

The move stunned state and Iron Range officials, who immediately started to take steps against the company's involvement, especially because Mesabi Metallics missed a project deadline at the end of the year.

Essar Global officials said they intend to stay involved in the project and hope to complete the half-built project on Minnesota's Iron Range.

In its lawsuit, Essar said it invested $700 million and guaranteed $1.1 billion in debt over nine years in the Nashwauk project. It acknowledges that it built only about 60 percent of the taconite pelletizing complex in Nashwauk before pulling the plug in 2016.

Essar officials said in the lawsuit that the state is misinterpreting a section of Minnesota law about the DOA's authority to "debar or suspend vendors." Essar claims the DOA's authority only relates to companies that procure materials or services for the state.

Essar insists that it "did not provide materials or services for the state under [its] agreements." Instead, Essar said it only agreed to reimburse Itasca County for the money the county and state actually spent on public infrastructure in Nashwauk. The reimbursement clause existed in the event the taconite plant was never completed.

"The DNR's use of the debarment process to exert leverage over Essar Global to pay the County's damages before the county proves its claim is an abuse of power and is arbitrary and capricious," the lawsuit said.

Essar's lawsuit is the latest volley in a highly controversial case that has ignited several lawsuits but has failed to produce a project that is close to completion.

DNR officials said the state agency has spent more than $140,000 in legal fees to date on lawsuits involving Essar and the Nashwauk project.