Virtual Currency: State of pandemonium continues

The Supreme Court in its recent decision in K Kishan v M/s Vijay Nirman Company Private Limited, Civil Appeal No 21825 of 2017, has put to rest the question of whether an arbitral award that has been challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (Act) by the award debtor can form the basis for an action under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code).

The enforcement of the Insolvency and Bankruptcy Code (hereinafter referred to as “IBC”) has reinforced the resolution of insolvency in a time bound manner and for maximization of the value assets. In furtherance of a more organized resolution process, the Insolvency and Bankruptcy Board (hereinafter referred to as “IBBI”) brought forth the Insolvency Resolution Process for Corporate Persons Regulations, 2016 (hereinafter referred to as the “Regulations”).

Committee of Creditors

The company being an independent legal entity is recognized for distinguished identity. The specialized corporate structure is monitored under the provisions of the Companies Act, 2013 (hereinafter referred to as the “Act”).

National Company Law Tribunal

Background:

Prime Minister Narendra Modi, elected in May 2014, will turn the corner again in May 2019 as he completes his first five year term. We visit some of the recent developments in his government’s legal and tax policies that have potentially mended a broken administrative process from the previous administration.

In the market of changing scenarios, the companies are faced by numerous challenges on the business front. At times they may be confronted with such financial crisis that it is no longer practical to continue the business operations and deal with the mounting losses. In such situations, the companies may be referred for insolvency resolution.

Guiding light

Relying on Report of Insolvency Law Committee, Supreme Court of India has held that insertion of Section 238A in the Insolvency and Bankruptcy Code (IBC) is retrospective.

Setting aside the NCLAT Order, the court in its judgement dated 11-10-2018 held that Limitation Act, 1963 will apply to the applications made under Section 7 and/or Section 9 of the IBC on and from its commencement on 1-12-2016 till 6-6-2018 when the provisions of applicability of Limitation Act were incorporated.

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.

Recently, in K. Kishan v. Vijay Nirman Company Pvt. Ltd. [See endnote. 1] the Supreme Court had an occasion to decide whether the provisions of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) can be invoked in respect of an Operational Debt where an Arbitral Award has been passed in favour of the Operational Creditor in respect of such Operational Debt, but, the objections against the said Arbitral Award are pending under Section 34 of the Arbitration & Conciliation Act, 1996 (‘A&C Act’).