The legal framework w.r.t. law of insolvency in India has seen considerable progress since the introduction of Insolvency and Bankruptcy Code, 2016 (“IBC”). The Legislature, taking cue from various judgments passed by the courts and the grey areas identified during the implementation of the provisions of IBC, introduced various amendments from time to time. However, notwithstanding such amendments, various legal questions involving interpretation and implementation of provisions of IBC keep arising posing challenges before the Courts to resolve the same.
In Harrington v. Purdue Pharma, the US Supreme Court in a 5-4 decision held that the US Bankruptcy Code does not permit a debtor to confirm a chapter 11 plan that releases non-debtors from similar or related claims the creditors could assert directly against them.
The National Company Law Appellate Tribunal (New Delhi Bench) (“NCLAT”) in two recent judgments passed in Raiyan Hotels and Resorts Pvt. Ltd. vs. Unrivalled Projects Pvt. Ltd. [Company Appeal (AT) (Insolvency) No. 1071 of 2023] and Aryan Mining & Trading Corpn Pvt. Ltd. vs Kail limited and Anr. [Company Appeal (AT) (Insolvency) No.
INTRODUCTION:
On August 17, 2023, China Evergrande Group, one of China’s largest real estate developers, and its affiliates filed chapter 15 petitions in the US Bankruptcy Court for the Southern District of New York in Manhattan seeking recognition of foreign restructuring proceedings in the High Court of Hong Kong and in the High Court of the Eastern Caribbean Supreme Court in the British Virgin Islands.
How did we get here?
The crypto markets were rocked again last week by the collapse and bankruptcy of FTX and Alameda Research. Within a few short days, Sam Bankman-Fried (SBF) and his companies went from a stabilizing force for markets and acting as an industry leader to causing one of the greatest disruptions in digital asset market history.
The Insolvency and Bankruptcy Code, 2016 (“IBC”) being a relatively new legislation, has witnessed inconsistent interpretation of its various provisions, especially in respect of certain legal issues, which are grey areas i.e. the issues which are not specifically dealt with under the existing provisions of IBC. One of such interesting legal issue is effect of breach of settlement agreements, entered into between two parties, where one party promises to pay a certain amount to the other party.
Introduction:
In a recent judgment, the Supreme Court of India, while keeping up the efforts of plugging various loopholes in Insolvency & Bankruptcy Code, 2016 (“Code”), decided an interesting legal issue relating to the scope of Section 5(20) of the Code, which provides the definition of “operational creditor”.
The Apex Court, in the case of Consolidated Construction Consortium Limited vs. Hitro Energy Solutions Private Limited, was seized of the following legal questions:
INTRODUCTION:
The Supreme Court in a recent judgment of Indus Biotech Pvt. Ltd. vs. Kotak India Venture (Offshore) Fund [AIR 2021 SC 1638] has settled an important question of law: ‘whetheran application filed under Section 8 of Arbitration & Conciliation Act, 1996 (‘A&C Act’) can be said to be maintainable in a proceeding initiated under Insolvency and Bankruptcy Code, 2016 (‘IBC’)’.