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Irrespective of the stage whether it is at the initial stage of the arbitral proceedings or at stage of the execution of the award, the appointment of the Arbitrator can be questioned, not particularly, u/s 13 of the Arbitration and Conciliation Act, 1996 but also u/s 34 – Mr. E.Murugan Vs. M/s. Shriram City Union Finance Ltd. – Madras High Court

In the present case, the 1st respondent appointed the Arbitrator unilaterally without the consent of the petitioner and the respondents which was challenged at award stage.
Hon’ble High Court clarified that:
(i) The petitioner is certainly entitled to challenge the appointment of the Arbitrator under Section 34 of the Act, if there is any violation of the provisions of the Act. Even though, the petitioner had not challenged the unilateral appointment of the sole Arbitrator under Section 13 of the Act, it would not certainly take away the rights of the petitioner to challenge the same under Section 34 of the Act.
(ii) In the present case, by virtue of Section 12(5) of the Act, the learned Arbitrator who was appointed unilaterally, is ineligible to be an Arbitrator and the award passed by him, deserves to be set aside, more particularly, as already observed, there is no express waiver in writing as contemplated under the proviso to Section 12(5) of the Act. Therefore, this Court is of the considered view that irrespective of the stage whether it is at the initial stage of the arbitral proceedings or at stage of the execution of the award, the appointment of the Arbitrator can be questioned, not particularly, under Section 13 but also under Section 34 of the Act and the same can be rectified by this Court.
(iii) Any violation of provisions of the Act is against the public policy of India and the award is liable to be set aside.

Irrespective of the stage whether it is at the initial stage of the arbitral proceedings or at stage of the execution of the award, the appointment of the Arbitrator can be questioned, not particularly, u/s 13 of the Arbitration and Conciliation Act, 1996 but also u/s 34 – Mr. E.Murugan Vs. M/s. Shriram City Union Finance Ltd. – Madras High Court Read Post »

High Court quashes all demands being prior to the date of commencement of the resolution plan – Adhunik Metaliks Ltd. Vs. State of Odisha and others – Orissa High Court

In this case, Petitioner has contended that as long as the demands raised against the Petitioner pertain to periods prior to the commencement of the insolvency proceedings, those demands can no longer be enforced against the Petitioner. High Court held that with all the above periods of demand being prior to the date of commencement of the resolution plan approved by the NCLAT, following the dictum in Ghanashyam Mishra & Sons Pvt. Ltd., the Court quashes all the demands, which have been challenged in these writ petitions.

High Court quashes all demands being prior to the date of commencement of the resolution plan – Adhunik Metaliks Ltd. Vs. State of Odisha and others – Orissa High Court Read Post »

There is no pre-condition of pendency of CIRP or Liquidation against the Principal Borrower for initiating Insolvency Resolution Process against the Personal Guarantor – UCO Bank Flagship Corporate Branch Vs. Navin Kumar Jain – NCLAT New Delhi

After Hon’ble Supreme Court dismissed the appeal in Mahendra Kumar Jagodia case, NCLAT, in this case, confirmed that there is no pre-condition of pendency of CIRP or Liquidation against the Principal Borrower for initiating Insolvency Resolution Process against the Personal Guarantor. NCLAT held that the dismissal of Civil Appeal by the Hon’ble Supreme Court on 06.05.2022 clearly approved the view taken by this Tribunal. It also held that the judgment of the Hon’ble Supreme Court in “Lalit Kumar Jain” does not support this case. NCLAT interpreted the Section 60 of IBC as the use of expression “without prejudice to sub-section (1)” under sub-section (2) makes it clear that provision of sub-section (2) in no manner cuts down the generality of the meaning of sub-section (1). The provision of Section 60(2) in no manner can cut down the generality of Section 60(1). Section 60(2) has been engrafted to cover the specific situation and the provision is an addition to and is supplemental to provision of Section 60(1).

There is no pre-condition of pendency of CIRP or Liquidation against the Principal Borrower for initiating Insolvency Resolution Process against the Personal Guarantor – UCO Bank Flagship Corporate Branch Vs. Navin Kumar Jain – NCLAT New Delhi Read Post »

Doctrine of Relation Back under IBC – Upon restoration, the Appeal relates back to the original date of filing – Mr. D.K. Mohanty Managing Director, Orissa Minerals Development Company Ltd. Vs. M/s. Jai Balaji Industries – NCLAT New Delhi

Instant case, the Operational Creditor invoked the Arbitration Proceedings. Both the Arbitral Awards were assailed by the Corporate Debtor under Section 34 of A&C Act, 1996 and were dismissed by separate Orders dated 27.02.2012 and 29.02.2012 respectively. The Appeals preferred by the Corporate Debtor under Section 37 of A&C Act, 1996, stood pending till 22.11.2019 on which date they were dismissed for non- prosecution. So even if 22.11.2019 is taken as the date of NPA as contended by the Learned Counsel for the Operational Creditor, the fact remains that till that date there is an ongoing Dispute. It can be safely construed that there was a Dispute in Existence prior to the issuance of the Demand Notice. Subsequently, the Appeal under Section 37 was restored on 02.03.2020. The Application for restoration was filed by the Corporate Debtor on 17.12.2019 with an advance Notice to the Operational Creditor. Thereafter the Demand Notice was issued on 14.02.2020. The Application was filed on 02.03.2020.
NCLAT set aside the admission order u/s 9 of IBC and held that upon restoration, the Appeal relates back to the original date of filing and therefore we note that there was a Pre-Existing Dispute prior to the date of issuance of the Demand Notice.

Doctrine of Relation Back under IBC – Upon restoration, the Appeal relates back to the original date of filing – Mr. D.K. Mohanty Managing Director, Orissa Minerals Development Company Ltd. Vs. M/s. Jai Balaji Industries – NCLAT New Delhi Read Post »

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