Summary: In EPC Constructions India Ltd. v. Matix Fertilizers & Chemicals Ltd., the Supreme Court addressed whether holders of non-cumulative redeemable preference shares can initiate insolvency proceedings under Section 7 of the IBC, as financial creditors. The Court held that preference shareholders are not creditors and cannot trigger insolvency proceedings, as preference shares remain part of the share capital even upon maturity, and conversion of debt into preference shares permanently extinguishes the original creditor relationship.

The Insolvency and Bankruptcy Code, 2016 (“IBC”), was enacted to inter alia provide a consolidated framework to resolve insolvency in a time-bound manner and to maximise the value of assets. This objective is further aided by a moratorium under Section 14 that halts legal proceedings against the corporate debtor, and the immunity provision under Section 32A, which offers a fresh slate to resolution applicants upon plan approval.

The Insolvency and Bankruptcy Code, 2016 (“Code”), has marked a significant shift in India’s corporate insolvency landscape, transitioning from a debtor-centric approach to a creditor-centric approach. With the committee of creditors (“CoC”) now driving the resolution process, it has become imperative for “related parties”, likely to sabotage the resolution process of a corporate debtor, to be excluded from the same.

The National Company Law Appellate Tribunal, New Delhi (“NCLAT”), has clarified and resolved the ambiguity surrounding the question of jurisdiction of the National Company Law Tribunal (“NCLT”) to entertain insolvency applications against personal guarantors where no corporate insolvency resolution process (“CIRP”) is pending against the corporate debtor. The issue was addressed through a recent judgment dated January 23, 2025, in Anita Goyal vs. Vistra ITCL (India) Ltd.

Recently, in State Bank of India v. India Power Corporation Ltd., Civil Appeal 10424 of 2024, the Hon’ble Supreme Court adjudicated upon the issue of certified copy of Order that is filed along with the appeal. 

The Hon’ble Supreme Court analysed several provisions of NCLT Rules and NCLAT Rules and held as follows:

i) Both the certified copy submitted free of cost as well as the certified copy which is made available on payment of cost are treated as “certified copies” for the purpose of Rule 50 of NCLT Rules.

The recent Grand Court decision of Ltd. (Unreported, 19 June 2024, Kawaley J) has reiterated and further clarified the principles to be applied to the remuneration of court-appointed receivers. Given the limited Cayman case law on the topic, the decision provides useful guidance and certainty to Receivers, and to those advising them.

What is a court-appointed 'Receiver', and what is 'remuneration'?

The Privy Council endorsed the Commercial Court's approach in the British Virgin Islands (BVI) in staying insolvency proceedings, even when faced with a pre-existing arbitration agreement, only when a debt is genuinely disputed on substantial grounds.

Introduction

FinReg Update [Jurisdiction] 2024 Regulatory Update Cayman – Q3 2024 Quick Fire Updates mourant.com 1. CRS reporting reminders The Department for International Tax Cooperation (DITC) issued an Updates Bulletin in June 2024 reminding Cayman Islands financial Institutions (FIs) of the following common reporting standard (CRS) annual reporting obligations: CRS Filing Declaration – required by all FIs with a CRS reporting obligation (deadline 31 July 2024) • FIs must make a CRS return to the DITC for each Reportable Account maintained during the reporting period.

Following the recent conflicting decisions in HQP Corporation (in official liquidation)1(HQP) and Direct Lending Income Feeder Fund, Ltd (in official liquidation)2 (DLI), Simon Dickson and Laura Stone of Mourant Ozannes (Cayman) LLP consider whether shareholder misrepresentation claims can be admitted in a Cayman Islands liquidation.

Hector Robinson KC

Partner | Cayman Islands

Justine Lau

Partner | Hong Kong

Nicholas Fox

Partner | Cayman Islands

Peter Hayden

Partner | Cayman Islands

Simon Dickson

Partner | Cayman Islands

Guide

This guide examines what a creditor needs to know about liquidating an insolvent Cayman company under the Cayman Companies Act (2020 Revision) and the Companies Winding Up Rules, 2018.