This commercial law newsletter provides a brief summary of the latest developments and updates in the month of June 2023 through judgments, notifications, circulars, and other updates in the commercial sector in India including Arbitration, Taxation, Insolvency & Bankruptcy, etc.
Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2015 (“Code”) for implementation of an arbitral award is not maintainable
The National Company Law Appellate Tribunal, Chennai (“NCLAT, Chennai”) has upheld that a Petition filed under Section 9 of the Code for implementation of an arbitral award is not maintainable and is against the objective of the Code. The NCLAT, Chennai further observed that Arbitration Proceedings and I & B Code Proceedings, cannot go on together.
The NCLAT, Chennai held that `Dispute’ in existence, means and includes raising a Dispute, before a Court of Law or an Arbitral Tribunal, before receipt of Notice, under Section 8 of the Code, and if such Dispute truly exists in fact and it is not spurious or an imaginary, and not a hypothetical one, the Adjudicating Authority, is to reject, the Petition, filed under the Code.
[M/s KK Ropeways Ltd. vs. M/s Billion Smiles Hospitality Comp. App (AT) (CH) (INS.) No. 246 / 2021 -decided on 12.06.2023]
Avoidance Applications can continue even after completion of the Corporate Insolvency Resolution Process (“CIRP”)
While relying upon an order passed by the Delhi High Court on 13.01.2023 in TATA Steel BSL Ltd. v Venus Recruiter Pvt. Ltd. & Ors., (2023) SCC OnLine Del 155, the NCLAT Delhi held that avoidance application is independent of the resolution of the Corporate Debtor and can survive the CIRP.
[Kapil Wadhawan vs. Piramal Capital & Housing Finance Ltd. & Ors. Comp. Appeal (AT) (Insolvency) No. 437 of 2023]
Mere filing of an application under Section 7 of the Code does not bar application for appointment of an arbitrator
The Bombay High Court observed that the mere filing of an application under Section 7 of the Code by itself, does not mean that the Adjudicating Authority, has taken cognizance of the matter. Therefore, an application under Section 11(6) of the Arbitration & Conciliation Act, 1996 cannot be said to be not maintainable.
[M/s Sunflag Iron & Steel Co. Ltd vs M/s. J. Poonamchand & Sons MCA No. MCA 374 of 2020 - decided on 05.06.2023]
The Government of India invites comments from stakeholders to improve the overall arbitration ecosystem
Ministry of Law & Justice, Government of India vide a notice dated 22.06.2023 invites comments and suggestions from stakeholders on the working of arbitration law in the country and the need for reforms in the Arbitration & Conciliation Act, 1996 to improve the overall arbitration ecosystem.
The Ministry of Law & Justice has constituted a sixteen-member expert committee headed by Dr. T.K. Vishwanathan, Former Secretary of the Department of Legal Affairs, for examining the working of arbitration law in India and recommending reforms in the Arbitration and Conciliation Act, 1996. The notice also summarised terms of reference of the committee.
Concise written comments/suggestions of the stakeholders can be addressed to the email ID (milind.mujumdar@gov.in and ndiac-dla@gov.in) on or before 03.07.2023.
The Notice dated 22.06.2023 published by Ministry of Law & Justice can be accessed here.
This newsletter was authored by Kushank Sindhu (Counsel), Anmol Singh (Associate Counsel), Apali Kaushal (Associate Counsel) and Sanya Singh (Associate Counsel) . The authors may be contacted at office@sigmachambers.in.
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