Indus Biotech Pvt. Ltd.

Even if an application under Section 8 of the Arbitration Act, 1996 is filed, the Adjudicating Authority has a duty to advert to contentions put forth on the application filed under Section 7 of IBC, examine the material placed before it by the financial creditor and record a satisfaction as to whether there is default or not – Indus Biotech Pvt. Ltd. Vs. Kotak India Venture (Offshore) Fund & Ors. – Supreme Court

Hon’ble Supreme Court held that there is default and the debt is payable, due to which the Adjudicating Authority proceeds to pass the order as contemplated under sub-section 5(a) of Section 7 of IB Code to admit the application, the proceedings would then get itself transformed into a proceeding in rem having erga omnes effect due to which the question of arbitrability of the so-called inter se dispute sought to be put forth would not arise. On the other hand, on such consideration made by the Adjudicating Authority if the satisfaction recorded is that there is no default committed by the company, the petition would stand rejected as provided under sub-section 5(b) to Section 7 of IB Code, which would leave the field open for the parties to secure appointment of the Arbitral Tribunal in an appropriate proceedings as contemplated in law and the need for the NCLT to pass any orders on such application under Section 8 of Arbitration Act, 1996 would not arise. In any proceeding which is pending before the Adjudicating Authority under Section 7 of IB Code, if such petition is admitted upon the Adjudicating Authority recording the satisfaction with regard to the default and the debt being due from the corporate debtor, any application under Section 8 of the Act, 1996 made thereafter will not be maintainable

Even if an application under Section 8 of the Arbitration Act, 1996 is filed, the Adjudicating Authority has a duty to advert to contentions put forth on the application filed under Section 7 of IBC, examine the material placed before it by the financial creditor and record a satisfaction as to whether there is default or not – Indus Biotech Pvt. Ltd. Vs. Kotak India Venture (Offshore) Fund & Ors. – Supreme Court Read Post »

Will the provisions of the Arbitration & Conciliation Act, 1996 prevail over the provisions of the IBC, 2016? If so, in what circumstances? – Indus Biotech Private Limited Vs. Kotak India Venture Fund-I – NCLT Mumbai

NCLT held that it is settled law that generalia specialibus non derogant – special law prevails over general law. In Gujarat Urja Vikas Nigam Limited v Essar Power Limited, the Hon’ble Supreme Court held that the Arbitration & Conciliation Act, 1996 is a general law. The court in that case was considering a question under the Electricity Act. It held that the Electricity Act being a special statute would have overriding effect over the Arbitration & Conciliation Act, which was the general statute. However, this decision was overturned by the Hon’ble Supreme Court in Consolidated Engineering Enterprises v Principal Secretary, Irrigation Department & others, wherein the Hon’ble Court held that the Arbitration & Conciliation Act is a special law, consolidating and amending the law relating to arbitration and matters connected therewith or incidental thereto.
In Hindustan Petroleum Corporation Limited v Pinkcity Midway Petroleums, the Hon’ble Supreme Court held that where an arbitration clause exists, the court has a mandatory duty to refer dispute arising between the contracting parties to arbitrator. It quoted with approval the decision of the same court in P Anand Gajapathi Raju & others v PVG Raju (dead) & others, wherein it was held that the language of section 8 of the Arbitration & Conciliation Act, 1996, is peremptory and the court is under an obligation to refer parties to arbitration.

Will the provisions of the Arbitration & Conciliation Act, 1996 prevail over the provisions of the IBC, 2016? If so, in what circumstances? – Indus Biotech Private Limited Vs. Kotak India Venture Fund-I – NCLT Mumbai Read Post »

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