NCLAT Stays Insolvency Proceedings Against Container Corporation of India

NCLAT Stays Insolvency Proceedings Against Container Corporation of India

The National Company Law Appellate Tribunal (NCLAT) has granted a stay on the insolvency proceedings against Container Corporation of India, a government-owned logistics firm.

The NCLAT’s decision comes after the National Company Law Tribunal (NCLT) ordered the initiation of corporate insolvency resolution proceedings against Container Corporation based on a petition filed by Roadwings International Pvt Ltd, an operational creditor, claiming a default of Rs. 87.5 crores.

The bench, led by Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), acknowledged that the original dispute between Roadwings International and Container Corporation is already pending before the Delhi High Court.

The financial dispute arose from an arbitration order in favour of Roadwings International, granting them the right to claim Rs. 813.67 crores from Container Corporation.

Roadwings International filed an execution petition in the Delhi High Court, arguing that Container Corporation failed to challenge the arbitration order within the statutory limitation period. The High Court is currently examining whether there was a delay on the part of Container Corporation and whether this delay can be condoned.

Therefore, the Appellate Tribunal deemed it appropriate to halt the insolvency process until certain preliminary issues, within the jurisdiction of the High Court, are addressed.

The NCLAT has listed the hearing for 4th September and affirmed that Roadwings International can continue pursuing the case in the High Court without any impact from this order.

The bench issued notices to the operational creditor Roadwings International and the interim resolution professional (IRP).

In the meantime, the NCLAT stayed the order passed by the Adjudicating Authority dated 12 July, 2023.