Essar Steel India Limited

Supreme Court sets aside judgment of Delhi High Court as the parties have agreed to refer their disputes to arbitration, after approval of Resolution Plan – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Supreme Court

Hon’ble Supreme Court sets aside the judgment of Delhi High Court in which Hon’ble High Court held that approval of the Resolution Plan clearly amounts to the extinguishment of all debts that were owed by the Corporate Debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan. Where the claim can ex facie be said to be unenforceable in law say for instance where it is barred by the statute of limitation or where the dispute of which reference is sought falls within the genre of non-arbitrability.

Supreme Court sets aside judgment of Delhi High Court as the parties have agreed to refer their disputes to arbitration, after approval of Resolution Plan – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Supreme Court Read Post »

Decision taken by Members of NCLT to recuse themselves from a matter cannot be interfered with in exercise of appellate jurisdiction of NCLAT – Arcelormittal Nippon Steel India Ltd. Vs. Palco Recycle Industries Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT observes that the Order impugned is an order by which both the Members recused themselves from the matters. The Order dated 09.01.2024 recusing by both the members is subject matter of the Appeal. The decision taken by both the members to recuse themselves from the matter cannot be interfered with in exercise of our appellate jurisdiction. Members having been recused themselves, we are unable to grant any relief to the Appellant as against the order dated 09.012024.

The Bench also holds that the President of the NCLT is master of roster. All administrative powers are vested with the President. It is always open for the Appellant or any aggrieved party to bring into the notice of the President on the administrative side to take appropriate measures with regard to the matter in question or for considering issuance of such order or direction as the President may deem fit and proper in accordance with law.

Decision taken by Members of NCLT to recuse themselves from a matter cannot be interfered with in exercise of appellate jurisdiction of NCLAT – Arcelormittal Nippon Steel India Ltd. Vs. Palco Recycle Industries Ltd. and Ors. – NCLAT New Delhi Read Post »

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court

In this case, IOCL invoked arbitration on 11.07.2017. On 02.08.2017 CIRP was initiated against Essar Steel. IOCL filed its claim. RP allotted Re. 1 as notional amount stating that the remaining claim amount is not admitted because of pending dispute with respect to this claim as the arbitration proceedings were initiated by IOCL. Post CIRP, IOCL filed this petition u/s 11 of the Arbitration Act.

Hon’ble High Court held that:

(i) The Successful Resolution Applicant is only bound to meet the claims as may have been accepted and ultimately form part of the approved Resolution Plan. This issue assumes seminal importance since the Successful Resolution Applicant cannot be left open to defend or oppose claims which are either not factored in the Resolution Plan nor can it be left to fend off actions that may be brought with respect to alleged or asserted dues of the Corporate Debtor which were not admitted.

(ii) Approval of the Resolution Plan clearly amounts to the extinguishment of all debts that were owed by the Corporate Debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan.

(iii) Jurisdiction also bids High Courts to ensure that dead disputes are not revived and parties forced to undertake arbitration.

(iv) The Court while considering the issue of reference would refuse to do so only in situations where either the arbitration agreement is found to be non-existent, where the claim can ex facie be said to be unenforceable in law say for instance where it is barred by the statute of limitation or where the dispute of which reference is sought falls within the genre of non-arbitrability.

(v) A refusal to refer would be justified when there is not “even a vestige of doubt” with respect to non-arbitrability or where it is evident that the matter is “demonstrably non-arbitrable”.

(vi) A reference of the disputes as sought by the petitioner would clearly amount to a reopening of the Resolution Plan and which is clearly impermissible in light of the finality which was accorded by the decision of the Supreme Court in CoC of Essar Steel India Ltd. (2019) ibclaw.in 07 SC.

(vii) The petition fails and shall stand dismissed.

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court Read Post »

Summary of landmark judgment of Supreme Court in Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta & Ors., in Insolvency and Bankruptcy Code, 2016

Acceding to request of Committee of Creditors, in order to do complete justice under Article 142 of the Constitution of India, and also for the reason that the law on Section 29A has been laid down for the first time by this judgment, we give one more opportunity to both resolution applicants to pay off the NPAs of their related corporate debtors within a period of two weeks from the date of receipt of this judgment, in accordance with the proviso to Section 29A(c).

Summary of landmark judgment of Supreme Court in Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta & Ors., in Insolvency and Bankruptcy Code, 2016 Read Post »

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