On October 3, 2023, the Ministry of Corporate Affairs (“MCA”) issued a notification exempting transactions, arrangements or agreements under the Cape Town Convention (as defined below), relating to aircraft, aircraft engines, airframes and helicopters from moratorium under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) (“Notification”).
In the recent case of Vistra ITCL (India) Limited & Ors. v. Mr. Dinkar Venkatasubramanian & Anr., the Supreme Court re-affirmed the legal position that persons who are merely beneficiaries of security by a corporate debtor do not qualify as financial creditors in the corporate insolvency resolution process (“CIRP”) of the corporate debtor. However, the Supreme Court also held that a resolution plan cannot dilute the security interest provided by the corporate debtor in favour of such beneficiaries.
Brief Facts
The Ministry of Corporate Affairs (“MCA”) issued a notification on October 03, 2023 under Section 14(3)(a) of the Insolvency and Bankruptcy Code, 2016 (“IBC”), exempting the applicability of moratorium under Section 14(1) of the IBC to transactions, arrangements or agreements under the Cape Town Convention on International Interests in Mobile Equipment (“Convention”) and the Protocol to the Convention on Inte
The National Company Law Appellate Tribunal, Principal Bench, New Delhi (“NCLAT”) has in the case of SVA Family Welfare Trust & Anr v. Ujaas Energy Limited & Ors inter alia held that a resolution plan can contain a clause which extinguishes security interest, such as personal guarantees, after paying compensation to the financial creditor in whose favour such security interest was created.
INTRODUCTION
One of the biggest changes brought in by the Insolvency and Bankruptcy Code, 2016 (“Code”) was the demarcation between treatment of interest vis-à-vis financial debt and operational debt. Over time, Courts have interpreted the Code with the aim to strengthen the foundation and resolve uncertainties. One such exercise, which has greatly impacted the insolvency regime, is the inclusion of interest in operational debt.
PHASE 1 – EXCLUSION OF INTEREST
I. INTRODUCTION
On October 3rd, 2023, the Ministry of Corporate Affairs (MCA) amended Section 14(1) of the Insolvency and Bankruptcy Code, 2016 thereby exempting the transactions, arrangements, or agreements related to aircraft, aircraft engines, airframes, and helicopters in the aviation industry from the operation of the moratorium imposed upon the admission of an insolvency plea.
Introduction
Introduction
On April 26, 2024, in what has been hailed as a pivotal moment for Indian aviation and insolvency law, the Delhi High Court (“High Court”) directed the Directorate General of Civil Aviation (“DGCA”) to deregister planes leased to Go First within five working days, providing much-sought after relief to the lessors of the aircraft.