Corporate Affairs Ministry Notifies Freeze Under IBC Inapt To Pacts Under Convention & Protocol Relating To Aircraft, Engines
The Ministry of Corporate Affairs, Government of India, has issued a 03 October 2023 notification published in the Gazette
Corporate Affairs Ministry Notifies Freeze Under IBC Inapt To Pacts Under Convention & Protocol Relating To Aircraft, Engines
These were adopted under the International Civil Aviation Organization and the International Institute for the Unification of Private Law at Cape Town
The Ministry of Corporate Affairs (MCA), Government of India, has issued a 03 October 2023 notification published in the Gazette of India (Extraordinary), intimating that Section 14(1) of the Insolvency and Bankruptcy Code (IBC), 2016, would be inapplicable to transactions, arrangements, or agreements under the convention and protocol related to aircraft, aircraft engines, airframes, and helicopters.
On 16 November 2001, the Convention on International Interests in Mobile Equipment, and the Protocol to the Convention on International Interests in Mobile Equipment were adopted under the joint auspices of International Civil Aviation Organization and the International Institute for the Unification of Private Law (UNIDROIT) at Cape Town, on matters pertaining to aircraft equipment.
India, a signatory to the Convention and the Protocol, acceded to it by depositing the instruments of accession on 31 March 2008 with UNIDROIT.
Meanwhile, Section 14(1) of IBC imposes a moratorium on the entity (Corporate Debtor), admitted into Corporate Insolvency Resolution Process (CIRP). The imposition ensures value maximization of the Corporate Debtor during CIRP, by prohibiting any form of recovery, institution of suits, continuation of proceedings, transfer/alienation of assets, enforcement of security interest, recovery of property, et al, against the Corporate Debtor.
Thus, the Union Government notified, “In exercise of the powers conferred by clause (a) of sub-section (3) of Section 14 of the IBC, the Central Government notifies that the provisions of sub-section (1) of Section 14 of the IBC shall not apply to transactions, arrangements, or agreements, under the Convention and the Protocol, relating to aircraft, aircraft engines, airframes, and helicopters.”