Parties adopting International Law in the agreement are not barred from taking recourse under the I&B Code: NCLAT
NCLT has jurisdiction to entertain an application under the IBC the parties cannot derive the advantage of the terms of the. An agreement where parties agreed that any suit or case is maintainable only in a Court outside India. The order passed by the NCLAT New Delhi in its decision in Excel Metal Processors Limited Benteler Trading International GMBH and Anr (Company Appeal (AT) (Insolvency) No. 172 of 2020) by Hon’ble Shri Justice S. J. Mukhopadhaya and Justice A.I.S. Cheema
The facts of the case were such that – Mr. Imran Iqbal Khan who is the director of the Corporate debtors/appellant company filed an application to substitute himself as the appellant in place of Corporate Debtor and transpose the appellant through Interim Resolution Professional. The tribunal allowed Mr. Imran Iqbal to be treated as sole appellant and delete the name of the first appellant/Corporate debtor. The Respondent/Operational Creditor recorded an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Excel Metal Processors Private Limited/Corporate Debtor asserting that the ‘Corporate Debtor’ submitted default on 27th March 2016 in making the installment to a degree of US $1,258,219.42 comprehensive of premium @ 15% per annum. Challenging the order of adjudicating authority the counsel on behalf of Appellant/Mr. Imran submitted referring the Understanding came to between the gatherings and presented that according to the Arrangement and as the Workplace of the Respondent/Operational Creditor is in Germany, any suit or case is viable just in the Court at Germany. No case can be recorded in any Court in India. Subsequently, Guidance has brought up the issue of the locale of the NCLT, in engaging the application under Segment 9 of the I&B Code.
But in the landmark judgment of NCLAT in the case of Binani Industries Limited vs. Bank of Baroda and Anr tribunal held that ‘Corporate Insolvency Resolution Process’/ insolvency proceedings is not a ‘suit’ or a ‘litigation’ or a ‘money claim’ for any litigation; No one is selling or buying the ‘Corporate Debtor’ a ‘Resolution Plan’; It is not an auction; it is not a recovery, which is an individual effort by the creditor to recover the dues through a process that had debtor and creditor on opposite sides; and it is not liquidation. The object is merely to get resolution brought about so that the Company do not default on dues.
Talking about the jurisdiction Appellate Authority according to section 408 of the Organizations Act, 2013, the NCLT has been comprised in various States. As far as the said arrangement, the Focal Government has informed and vested the force on individual Public Organization Law Councils to manage the matter inside its region, where the enrolled workplaces of the Organizations are arranged. According to Segment 60(1) of the I&B Code, “The Settling Authority, comparable to bankruptcy goal and liquidation for corporate people including corporate borrowers and individual underwriters thereof will be the Public Organization Law Court having regional locale over where the enrolled office of the corporate individual is found”.
The appeal gets dismissed as on giving the option to pay the debts payable to Operational Creditor by either Corporate Debtor or the Appellant himself, it was turned out that both corporate debtor and the Appellant were not in a position to do so, therefore due to the absence of any merit tribunal decides not to interfere with the impugned order dated 25th June 2019.