Key Highlights

I. Supreme Court: Scope of intervention by High Courts in cases of orders passed by the National Company Law Tribunal

II. Supreme Court: State legislature cannot enact law which affects the jurisdiction of the Supreme Court

III. Supreme Court: Difference between inadequacy of reasons in arbitral award and unintelligible awards

IV. NCLT: RP can take possession of a corporate debtor's assets which are subject matter of litigation to facilitate the corporate insolvency resolution process

The Reserve Bank of India (RBI) issued a revised prudential framework for resolution of stressed assets on 7 June 2019 (Revised Circular) in supersession of the erstwhile circular on Resolution of Stressed Assets dated 12 February 2018 (Feb 12 Circular) which was struck down by the Hon’ble Supreme Court on 2 April 2019.

The Reserve Bank of India (“RBI”) has issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“New Framework”) on June 07, 2019[1] in which the RBI has continued the core principles of its circular dated February 12, 2018 (“February 12 Circular”) and has added provisions encouraging both informal and formal restructuring in India.

In as much as the Government has been in the consistent process of encouraging business operations in the nation, it also has the objective to create more transparent and systematic mechanism ensuring time bound manner and for maximization of the value assets. One of the major challenges faced by the modern commercial sector is the reposition of faith of the creditors who put their hard-earned investments at the fate of the success of the business transactions undertaken.

Resolution Procedure

In order to facilitate the smooth conduct of business transactions the Government has put in numerous efforts in the form policies and regulations. While the greatest threat posed to the lenders in the modern market operations is the impact of non-performing assets or bad loans. In order to maximize the value assets in a time bound manner, the Government enforced the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC').

Virtual Currency: State of pandemonium continues

India is increasingly becoming one of favoured business destinations on the international scale. This is attributable to a number of factors including the schemes and policies introduced by the Government from time to time. One of the major reasons for the improvement of the country’s position in the parameter of ‘Ease of Doing Business’ is the development of an efficient insolvency and bankruptcy resolution mechanism.

Insolvency and Bankruptcy Resolution

Supreme Court ruling in ArcelorMittal case — An analysis

By Mitali Daryani

The Supreme Court on 4-10-2018 allowed yet another opportunity to mining major ArcelorMittal and Russia's VT B Capital-backed NuMetal to bid for Essar Steel provided they clear their Non-Performing Asset (NPA) dues in two weeks. The bench comprising Justice R. F. Nariman and Justice Indu Malhotra, has also taken this opportunity to interpret and clarify Section 29A of the Insolvency and Bankruptcy Code, 2016. However, the Essar saga is far from over.

MUMBAI          SILICON VALLEY          BANGALORE          SINGAPORE          MUMBAI BKC          NEW DELHI           MUNICH           NEW YORK

Deal Destination 

Market for Stressed Assets: Truly

‘Stressed’ or Disguised ‘Desserts’ Spelt

Backwards?

August 2018

© Copyright 2018 Nishith Desai Associates

It is known that I & B Code came into effect from 01.12.2016.  Subsequently, it perspired during various proceedings in NCLT that it has no specific provision for limitation period and/or categorical applicability of Limitation Act on initiation of insolvency process under the Act.

However, the limitation period is prescribed under the Limitation Act for every suit instituted, appeal preferred, and application made under the law.