This article provides an overview of the significance of mediation in India, particularly in the context of the IBC. It highlights the adoption of the Mediation Bill 2021, to promote accessible and popular mediation practices. The Singapore Convention on Mediation and its benefits for enforcing settlement agreements globally are discussed. The successful incorporation of mediation in insolvency processes in the United States of America, the United Kingdom, the European Union, Japan, Singapore, and Australia offers valuable insights for India. The article also emphasizes the need for effective measures to address delays in the application of the CIRP and the importance of voluntary participation in mediation. It also highlights the importance of formalizing mediation within the IBC and addressing challenges related to pre-litigation mediation, exceptional circumstances, international mediation, and the modification of moratorium provisions. Overall, mediation is recognized as a valuable tool for efficient dispute resolution and stakeholder protection in insolvency cases.
Author wise: Institute of Law Nirma University
Avoidance Application: Survival Post-CIRP in Light of the Venus Judgement – By Siddharth Sharma
In its judgement, the bench has held that the avoidance application does not die with the completion of the CIRR of a corporate debtor in cases where these transactions are not accounted for in the approved resolution plan.
Hostile Takeover – A Forced Acquisition and Its Defences – By Ronit Khandelwal and Palash Thakkar
The term “Hostile takeover” has made hue and cry in the media and has been in spotlight since the hostile takeover of Twitter led by Elon Musk which took place last year. The method devised by Elon Musk is Bear Hug strategy. In response to the offer made by Mr. Musk Twitter commenced the Poison Pill strategy to prevent the hostile takeover of the company.
The Committee of Creditors in a Resolution Process – Alterations, Exclusions and Recent Developments – By Mr. Naman Sharma & Ms. Kareena Bakhtyarpuri
It is certain that such a strict action from NCLAT is required in this regard. If the same shall not been taken there would have been chaos as IRP and CoC then could have entered into settlement deeds and even genuine claims of financial creditors would have been altered into an operational creditor thus altering the CoC. The core feature of CoC that is it is formed from all the Financial creditors in itself would have been at stake if such authorisation would have been granted. A restrictive yet welcoming step is taken by the adjudicating authority for ensuring a better and transparent resolution process.
Personal Guarantor – A Stakeholder? – By Simran Pahwa
In the case of ‘Lalit Mishra Vs Sharon Bio Medicine’[5], it was held that the Personal Guarantor’s Right to subrogation is not an absolute right. Further, it was elaborated that the debt recovery of the Personal Guarantor would in fact be antithetical to the objective of maximization of assets by further encumbering the assets of the company.[6] Moreover, it cannot to be denied that the Guarantors also had some involvement in the management of the company, which eventually led to such insolvency. In the recent judgment with respect to challenge of provisions related to Personal Guarantors in the ‘Anil Ambani case’[7] in 2019, it was held that the provisions in the code, specifically Section 14 and Section 31(1), have been structured in a way so as to indicate that the guarantor’s rights to subrogation cannot be taken away if in case he/she settles the debts of the Corporate Debtor before or during the CIRP, but before the passing of the Resolution plan. Post passing of the Resolution Plan, as per Section 31(1) of the Code, it shall be binding on all stakeholders including the guarantors.
Pre-Pack: The Future of IBC – By Varun Akar
While every reform brings a profusion of hurdles and challenges, so does the concept of pre-pack will. Considering the present scenario, the lack of existing laws on this concept will act as an obstacle in achieving the result of the pre-pack resolution. Thus, there will arise a need for successful formulation and implementation of a set of laws on this subject matter. Once implemented, it will be testing the expertise of the insolvency practitioners to work more precisely, conscientiously and thoroughly. Though the concept has a lot of disadvantages, as mentioned above, and it will surely surpass all of it once implemented after taking into consideration all its disadvantages. Applicability of Section 29A of the IBC in the matters of pre-pack resolution will have a long way to travel for determining its success in India. Also, for a pre-pack resolution to be successful there needs to be extensive marketing of the assets of the corporate debtor so that the interested or parties concerned can take over the business or assets of the corporate debtor.