The right to initiate Application under Section 9 of the IBC shall not be taken away by the Operational Creditor by any Agreement of arbitration in the contract, when Operational Creditor elect to initiate proceedings under Section 9 of the IBC – Hasan Shafiq Vs. CT – Technologies ApS – NCLAT New Delhi
The present is a case where Operational Creditor is a company registered under the companies incorporated under the laws of Denmark and is a foreign entity, whereas the Corporate Debtor is a company registered under the Companies Act, 1956, which was within the territorial jurisdiction of NCLT, Mumbai.
NCLAT holds that despite there being clause of arbitration in Agreement, Application under Section 9 was fully maintainable and could be proceeded with by Adjudicating Authority. The proceedings under Code having been given overriding effect, the right to initiate Application under Section 9 shall not be taken away by the Operational Creditor by any Agreement of arbitration in the contract, when Operational Creditor elect to initiate proceedings under Section 9, it cannot be rejected on the aforesaid ground. We, thus, do not find any substance in the above submission of learned Counsel for the Appellant.
