Whether claims for ‘loss of rent,’ ‘arbitration costs,’ and ‘damages’ by Home allottees would be categorized as Financial Debt under IBC – Mr Jossy Steephen Kattur RP of Kerala Chamber of Commerce and Industries Vs. Phoenix ARC Pvt. Ltd. and Ors. – NCLT Kochi Bench

Hon’ble NCLT Kochi Bench held that:
(i) Whether the liability originates from an arbitral award or a court decree, it would be classified as either financial or operational debt, contingent upon the intrinsic nature of the underlying claim as determined by the arbitral or court proceedings.
(ii) The categorization of creditors under the Code depends on understanding the fundamental nature of the transaction.
(iii) Considering the underlying nature of claims of ‘loss of rent,’ ‘cost of arbitration,’ and ‘damages’, we find it right to reclassify these claims from ‘other creditors’ to “Financial Creditors.”

Whether claims for ‘loss of rent,’ ‘arbitration costs,’ and ‘damages’ by Home allottees would be categorized as Financial Debt under IBC – Mr Jossy Steephen Kattur RP of Kerala Chamber of Commerce and Industries Vs. Phoenix ARC Pvt. Ltd. and Ors. – NCLT Kochi Bench Read Post »