Supreme Court allows mediation proceedings
Senior advocates of law firms Lawfic and Karanjiwala & Co represented the two companies
Supreme Court allows mediation proceedings
Senior advocates of law firms Lawfic and Karanjiwala & Co represented the two companies
The Supreme Court has recently given permission to an operational creditor of a company under insolvency, to continue arbitration proceedings. The top court did this despite its own and the Committee of Creditors' approval of the corporate insolvency resolution plan.
A bench of Justice AM Khanwilkar and Justice Dinesh Maheshwari was hearing a challenge against an order of the National Company Law Appellate Tribunal (NCLAT) refusing to entertain an appeal arising from the order of the National Company Law Tribunal, Mumbai.
As per the plea, the respondent Ricoh India owed Rs.511 crores to the appellant. The NCLT had approved a resolution plan (RP) rejecting Fourth Dimension Solutions' (appellant's) claims despite the latter being the highest operational creditor of Ricoh.
The Supreme Court had also approved the RP despite the appellant's challenge pending before the NCLAT. The top court had, however, directed NCLAT to decide the appellant's challenge on merits.
But the NCLAT said that since the court had approved the RP, it would be impossible for the tribunal to take a contrary stand. Hence, it rejected the appellant's challenge.
It prompted the appellant to move the Supreme Court. "The consequence of the above observation is that the appellant has been left to hang dry without any recourse to satisfy its legitimate claims," the petition said.
The appellant also pointed out that it had invoked arbitration against Ricoh but the same had been adjourned sine-die on the admission of the insolvency petition.
However, the court disposed of the appeal. It ordered, "It is stated that some arbitration proceedings were pending between the parties. If so, all contentions available to both sides be decided in the said proceedings on its own merits in accordance with the law."
Briefed by the law firm Lawfic, while senior advocates Kapil Sibal and PP Chaudhary appeared for the appellant, updated by Karanjawala & Co, the respondent was represented by senior advocate Mukul Rohatgi.