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Corporate Amicus: September 2018

Section 29A of IBC: Impact and recent developments
By Surbhi Jaju
A resolution applicant as originally defined under the Code meant any person who submits a resolution plan to the resolution professional. After inclusion of section 29A in the Code, ambit of ineligibility became very wide declaring disqualification of many people due to lack of definition of the term ‘related to’ under the Code. Insolvency and Bankruptcy Code (Second Amendment) Bill 2018 now defines ‘related person’ and brings many people in the ineligibility criteria. Discussing various case law from NCLT and Supreme Court, the first article in this issue of Corporate Amicus notes that application of the said section might also disbar crucial stakeholders to bid for the revival of the company, and therefore, certain amount of leniency by the courts in deciding the issue of disqualification is the need of the hour...

Pendency of objections to an arbitral award amounts to a dispute for purposes of section 9 of IBC
By Ankit Parhar
Recently, the Supreme Court had an occasion to decide whether the provisions of the Insolvency and Bankruptcy Code, 2016 can be invoked in respect of an Operational Debt where an arbitral award has been passed in favour of the Operational Creditor in respect of such Operational Debt, but, the objections against the said arbitral award are pending under Section 34 of the Arbitration & Conciliation Act, 1996. It was held that mere factum of challenge of an arbitral award under Section 34 would be sufficient to state that the Corporate Debtor disputes the award and that such a case would be treated as a case of a pre-existing ongoing dispute. It was also held that Section 238 of the IBC would apply in case there is an inconsistency between the IBC and the A&C Act. The second article in this issue however notes that the concept still remains rather subjective and it will have to be determined in the facts of each case whether the dispute truly exists in fact and is not spurious, hypothetical or illusory...

Notifications and Circulars

  • Streamlining the process of public issue of debt securities, non-convertible preference shares and securitized debt instruments
  • Role of Sub-Broker vis-a-vis Authorized Person - SEBI removes sub-brokers as a category of market intermediaries
  • Extension of Trading hours of Securities Lending and Borrowing Segment
  • Draft Companies (Cost Records and Audit) Amendment Rules, 2018
  • Solar rooftop projects facing hurdles from State Electricity Distribution Company

Ratio decidendi

  • Direction for constitution of a fresh Committee of Creditors justified as home buyers in real estate projects come within the purview of ‘financial creditors’ – Supreme Court
  • No Civil Court has jurisdiction in respect of any matter under IBC when NCLT empowered for same – Bombay High Court
  • Arbitration - Court acting under Section 11 cannot limit its role to ascertaining mere existence of arbitration agreement – Supreme Court
September, 2018/Issue-84 September, 2018/Issue-84

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