December 22, 2021
In this case, the Applicant filed an interlocutory application before the AA under Section 8 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Applicant’s prayed to the AA for referring the parties to arbitration for settling their disputes, instead of admitting the application filed by the FC under Section 7 of the Code. The Applicant contended that the Optionally Convertible Redeemable Preference Shares, as subscribed to by the FC in terms of the Share Subscription and Shareholders Agreement, had an arbitration clause; and therefore, the parties must be referred to arbitration. The main issue to be decided was – “Will the provisions of the Arbitration Act prevail over the provisions of the Code?”
Relying on the cases P Anand Gajapathi Raju & others v. PVG Raju (dead) & others and Hindustan Petroleum Coproration Limited v. Pinkcity Midway Petroleums, the tribunal observed that the Arbitration Act was a special act and where an arbitration clause existed, it was mandatory for the court to refer the dispute to arbitration. Further, the tribunal observed that the CD was “a solvent, debt free and profitable company. It will unnecessarily push an otherwise solvent, debt-free company into insolvency, which is not a very desirable result at this stage.” Also, the subject matter of the petition involved valuation of shares, calculation and conversion formula and fixing the Qualified Initial Public Offering date, which were all arbitrable disputes. Therefore, the Tribunal, observing that an attempt must be made to reconcile the difference between the parties and no meaningful purpose would be served by pushing the CD into CIRP, allowed the application and referred the parties to arbitration.
Full text of the order accessible here.
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In the matter of Coastal Projects Limited (Kolkata Bench (06.12.2018)) Facts This application was filed by the State Bank of India (FC) for initiating CIRP against Coastal Projects Ltd. (CD) under Section 7 of the Code. The application was admitted through an order dated 5 January 2018, and an IRP was appointed, who invited […]December 22, 2021
Abbreviations Used Code – Insolvency and Bankruptcy Code, 2016 CIRP – Corporate Insolvency Resolution Process AA – Adjudicating Authority (NCLT) CD – Corporate Debtor FC – Financial Creditor OC – Operational Creditor CoC – Committee of Creditors IRP – Interim Resolution Professional RP – Resolution Professional RA – Resolution Applicant (12-07-2021) Delhi Bench […]July 20, 2021
In the matter of Chemizol Additives Pvt. Ltd. (Bengaluru Bench (08.06.2020)) Facts In this case, the OC filed an application under Section 9 of the Code seeking initiation of CIRP against the CD on the ground of failure of payment of employment dues. The tribunal noted that the Employment Agreement between the parties stated […]December 22, 2021
Abbreviations Used Code – Insolvency and Bankruptcy Code, 2016 CIRP – Corporate Insolvency Resolution Process AA – Adjudicating Authority (NCLT) CD – Corporate Debtor FC – Financial Creditor OC – Operational Creditor CoC – Committee of Creditors IRP – Interim Resolution Professional RP – Resolution Professional RA – Resolution Applicant FY – Financial Year – […]September 6, 2021