insolvency

Court Deposit Not Payment: Delhi HC’s Key Ruling on Arbitration and Insolvency Intersection

Summary: The Delhi High Court, in McNally Bharat Engineering Company Limited v. Metso India Pvt. Ltd., has held that an amount deposited in court as a condition for stay of an arbitral award, pending a challenge under Section 34 of the Arbitration & Conciliation Act, does not amount to payment to the award-holder and remains an asset of the award-debtor. Therefore, upon the award-debtor going into CIRP under the Insolvency and Bankruptcy Code during the pendency of such challenge, if a claim is not submitted to the Resolution Professional and does not form part of an approved resolution plan, it stands extinguished. Consequently, the pending Section 34 petition challenging the underlying arbitral award is rendered infructuous, and the deposited amount is to be refunded to the award-debtor turned corporate debtor.

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Summary: Part I of this article examined the interplay between admiralty and insolvency law in India, particularly the effect of insolvency proceedings against a corporate debtor on in rem proceedings against its vessels. Part II turns to the conflict between in rem admiralty actions and in personam arbitration proceedings. It traces how Indian courts have…

Navigating Legal Waters: Interplay between the Admiralty Act, Insolvency and Arbitration Regime of India - Part I

Summary: The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, brought much needed reform to India’s maritime legal framework. Though its coexistence with the Insolvency and Bankruptcy Code, 2016, and the Arbitration and Conciliation Act, 1996, has given rise to contentious jurisdictional issues that Indian courts continue to navigate. The article discusses judicial efforts to reconcile these legislative frameworks.

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Vidarbha: The Final Chapter

Summary: This article examines the comprehensive trajectory of the Vidarbha decision, beginning with a judgement based on exceptional circumstances that expanded the discretion of the Ld. NCLT(s) and contributed to delays in insolvency admissions. It further discusses the judicial limitation imposed by the Hon’ble Supreme Court and concludes with the legislative correction provided by the Insolvency and Bankruptcy Code (Amendment) Act, 2026.

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Cumulative Redeemable Preference Shareholders Cannot Trigger Insolvency Proceedings: Supreme Court

Summary: In EPC Constructions India Ltd. v. Matix Fertilizers & Chemicals Ltd., the Supreme Court addressed whether holders of non-cumulative redeemable preference shares can initiate insolvency proceedings under Section 7 of the IBC, as financial creditors. The Court held that preference shareholders are not creditors and cannot trigger insolvency proceedings, as preference shares remain part of the share capital even upon maturity, and conversion of debt into preference shares permanently extinguishes the original creditor relationship. This landmark judgement reinforces the fundamental distinction between debt and equity, clarifying that IBC remedies are available only to creditors and not shareholders.

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Judicial Interplay with Legislation: Analysing the Insolvency and Bankruptcy (Amendment) Bill, 2025 [Part II]

Continuing the analysis presented in Part I of this blog, the Insolvency and Bankruptcy Code (Amendment) Bill, 2025 (“Bill”), proposes incorporation of the rationale laid down by various judicial forums in the following judgments:

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IBC vs. PMLA: Supreme Court Reinforces Jurisdictional Boundaries in Kalyani Transco Case

The Insolvency and Bankruptcy Code, 2016 (“IBC”), was enacted to inter alia provide a consolidated framework to resolve insolvency in a time-bound manner and to maximise the value of assets. This objective is further aided by a moratorium under Section 14 that halts legal proceedings against the corporate debtor, and the immunity provision under Section 32A, which offers a fresh slate to resolution applicants upon plan approval.

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Choosing the Correct Door: NCLAT Clarifies Jurisdiction for Insolvency of Personal Guarantors

The National Company Law Appellate Tribunal, New Delhi (“NCLAT”), has clarified and resolved the ambiguity surrounding the question of jurisdiction of the National Company Law Tribunal (“NCLT”) to entertain insolvency applications against personal guarantors where no corporate insolvency resolution process (“CIRP”) is pending against the corporate debtor. The issue was addressed through a recent judgment dated January 23, 2025, in Anita Goyal vs. Vistra ITCL (India) Ltd. & Anr.[1] (“Judgement”).

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Pending Section 37 Appeal under Arbitration Act: Not a Legitimate Ground for Entertaining Belated Claim under IBC

The Hon’ble Supreme Court in the landmark RPS Infrastructure Ltd vs. Mukul Sharma[1] judgement, once again delved into the issue of claims being made beyond the statutorily prescribed timelines in a Corporate Insolvency Resolution Process (“CIRP”). In this case, an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), was pending against a Section 34 award and the Appellant submitted a claim for the same subsequent to the committee of creditors (“COC”) approving the resolution plan.

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Group Insolvency: Introduction

Group means two or more enterprises, which directly or indirectly are in a position to exercise 26% or more voting rights in other enterprise or appoint more than 50% members of the Board of Directors in the other enterprise or control the management or affairs of the other enterprise.[1]

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