636

Arbitral Tribunal is the final arbiter of the manner in which the contract before it has to be interpreted – Reliance Communications Ltd. Vs. Unique Identification Authority of India – Delhi High Court

Hon’ble Delhi High Court held that the dispute is entirely within the realm of interpretation of contract. There is a plenitude of authorities to the effect that the High Court, in exercise of its jurisdiction under Section 34 of the 1996 Act, does not interfere with the manner in which the learned Arbitral Tribunal interprets contractual covenants, unless the interpretation is clearly contrary to the contract itself, to the extent that it amounts to re-writing the contract, or is contrary to other provisions of the contract. Else, the Arbitral Tribunal is the final arbiter of the manner in which the contract before it has to be interpreted. Where the contractual covenants unambiguously indicate one way, no real occasion arises for the learned Arbitral Tribunal to rule the other, by recourse to practices in the trade. All that Section 28(3) requires the learned Arbitral Tribunal to do is to take into account the terms of the contract and trade usages. Importantly, the expression “terms of the contract” precedes “trade usages”.

Arbitral Tribunal is the final arbiter of the manner in which the contract before it has to be interpreted – Reliance Communications Ltd. Vs. Unique Identification Authority of India – Delhi High Court Read Post »

Liquidator is required to follow the terms and conditions of Clause 12 of Schedule 1 of the Liquidation Process Regulations, 2016 and cannot lay down its own terms and conditions in the EOI regarding the period for payment of balance sale consideration – Vinod Kumar Kothari Liquidator of Nicco Corporation Ltd. Vs. Sneha Techno Equipments Pvt. Ltd. – NCLAT New Delhi

In this case, in the EOI, the period for payment of balance sale consideration was given 15 days whereas after the date of amendment of period for payment of balance sale consideration to 90 days in Liquidation Regulations(amended on 25.07.2019). The Respondent had been asking for 90 days from the date of demand in terms of amendment dated 25.07.2019.

Hon’ble NCLAT held that:
(i) The very fact that the circular dated 26.08.2019 has already been withdrawn and that the amendment dated 25.07.2019 was in vogue as on 08.07.2020, it was incumbent upon the Liquidator to have followed the provisions of Regulation 33 much less Schedule 1 (Clause 12) of the Regulations which has not been followed and the terms and conditions have been provided by the Liquidator on its own in the EOI overlooking the terms and conditions as envisage in Schedule 1.
(ii) In such circumstances, the action of the Liquidator is totally unsustainable, therefore, we do not find any error in the order under challenge in which all the factors of this case have been thoroughly appreciated.
(iii) Upheld the decision of NCLT Kolkata Bench.

Liquidator is required to follow the terms and conditions of Clause 12 of Schedule 1 of the Liquidation Process Regulations, 2016 and cannot lay down its own terms and conditions in the EOI regarding the period for payment of balance sale consideration – Vinod Kumar Kothari Liquidator of Nicco Corporation Ltd. Vs. Sneha Techno Equipments Pvt. Ltd. – NCLAT New Delhi Read Post »

NCLT dismisses an IA filed by RP on SAP accounting software discontinued during moratorium – Pritam Bayal, RP of BKM Industries Ltd. Vs. NIT Global Data Centers & Cloud Infrastructure India Pvt. Ltd. – NCLT Kolkata Bench

NCLT Kolkata Bench held that:
(i) In view of section 14(2A) of the Code, the Respondent has rightfully terminated the services after non-payment of dues for the services rendered during the CIRP period. Ample warning had been given before the Respondent discontinued the services and deleted the data.
(ii) From the reading of section 19(2) of the Code, it is observed that the Resolution Professional can file an application to the Adjudicating Authority if any personnel of the Corporate Debtor or promoter or person related to the management of the Corporate Debtor or any other person does not cooperate with the Resolution Professional. The Respondent herein is a service provider and fall outside the ambit of a promoter or a personnel of the Corporate Debtor or a person in management of the Corporate Debtor but the Applicant does fall under the purview of “other person”, hence the I.A. is maintainable.

NCLT dismisses an IA filed by RP on SAP accounting software discontinued during moratorium – Pritam Bayal, RP of BKM Industries Ltd. Vs. NIT Global Data Centers & Cloud Infrastructure India Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Whether non-disclosure by an Arbitrator having represented a party/affiliate in High Court during the pendency of the arbitration would amount to fraud – C and E Ltd (Components and Equipments Ltd.) and Anr. Vs. Gopal Das Bagri and Ors. – Calcutta High Court

High Court held that:
(i) An individual or a group of persons, including a family, in control and management of a company, upon lifting of its corporate veil, can definitely qualify as an “affiliate”, within the meaning of the Explanation 2 to the Fifth and Seventh Schedules, read with Section 12 of the Act of 1996.
(ii) It is observed from the language of Section 12(2) that it same castes a continuous obligation on the Arbitrator to remain neutral and continue to disclose to the parties any acts or omissions that are likely to fall foul of the mandate under Section 12, in the course of the Arbitration.
(iii) The object and purpose of the disclosure in terms of section 12(2) essentially mean that the Arbitrator shall not, during the subsistence of the proceedings, continue such association.
(iv) A disclosure by the Arbitrator of past association with one party to the Arbitration would essentially impose an undertaking on the Arbitrator not to do so, during the pendency of the Arbitration.
(v) It is well established that this Court or any Court or person cannot enter into the mind of the Arbitrator to determine whether there was actual or real bias. Even a threadbare reading of the Award in fact and law may not disclose or indicate any bias.
(vi) Any infraction of section 12(2) and (5) and the grounds under the Fifth and Seventh Schedules and the object and purpose thereof, would desecrate the foundation of the institution of Arbitration.

Whether non-disclosure by an Arbitrator having represented a party/affiliate in High Court during the pendency of the arbitration would amount to fraud – C and E Ltd (Components and Equipments Ltd.) and Anr. Vs. Gopal Das Bagri and Ors. – Calcutta High Court Read Post »

NCLAT set aside order of AA on interest component in Operational Debt to meet the minimum threshold of Rs. 1 crore u/s 4 of IBC – CBRE South Asia Pvt. Ltd. Vs. United Concepts and Solutions Pvt. Ltd. – NCLAT New Delhi

The Adjudicating Authority in the impugned order has taken a view that interest cannot be added to constitute an Operational Debt, hence, the Principal Amount being less than Rs.1 Crore, the minimum threshold is not fulfilled and the application is rejected on this ground only. NCALT observed that the above issue has already been answered by this Tribunal in Prashant Agarwal’s Case reported at (2022) ibclaw.in 509 NCLAT and held that the rejection of the application under Section 9 on the above ground is erroneous. In result, we set aside the impugned order passed by the Adjudicating Authority and remit back the matter before the Adjudicating Authority for fresh consideration in accordance with law. Appeal is allowed accordingly.

NCLAT set aside order of AA on interest component in Operational Debt to meet the minimum threshold of Rs. 1 crore u/s 4 of IBC – CBRE South Asia Pvt. Ltd. Vs. United Concepts and Solutions Pvt. Ltd. – NCLAT New Delhi Read Post »

NCLT rejects Resolution Plan of M2K Developers Pvt. Ltd. for the Corporate Debtor, M/s. Anil Mega Food Park Pvt. Ltd., for the reason that it cannot be effectively implemented – Ramchandra Dallaram Choudhary RP of Anil Mega Food Park Pvt. Ltd. – NCLT Ahmedabad Bench

Due to the National Highway in between the main road and unit of the Corporate Debtor, there exists no approach road. It is not possible for the RP, and the CoC to make available such an approach road leading to the unit of the Corporate Debtor which the Resolution Applicant is demanding through the Resolution Plan as approved by the CoC. The Adjudicating Authority held that in our considered opinion, such Resolution Plan, if at all approved, cannot be effectively implemented by anyone. The proviso to section 31(1) does not permit us to approve such conditional Resolution Plan. Hence, we reject the Resolution Plan submitted.

NCLT rejects Resolution Plan of M2K Developers Pvt. Ltd. for the Corporate Debtor, M/s. Anil Mega Food Park Pvt. Ltd., for the reason that it cannot be effectively implemented – Ramchandra Dallaram Choudhary RP of Anil Mega Food Park Pvt. Ltd. – NCLT Ahmedabad Bench Read Post »

Scroll to Top