The National Company Law Appellate Tribunal (NCLAT) has halted the ongoing insolvency proceedings against Container Corporation of India. The issue arose when Roadwings International, an operational creditor, filed a petition with the National Company Law Tribunal (NCLT) on July 12, seeking to initiate Corporate Insolvency Resolution Proceedings (CIRP) against the public sector enterprise.
However, Container Corporation of India Ltd. contested the NCLT's decision and appealed to the appellate tribunal. On July 14, the appellate tribunal granted a stay on the NCLT's order. Additionally, the operational creditor Roadwings International and the interim resolution professional (IRP) received notices and were represented by their counsel in the hearing.
The NCLAT provided a timeframe for the parties involved to respond to the appeal. The operational creditor was given one week to file a reply, and Container Corporation of India was granted two weeks to submit a rejoinder. The next hearing is scheduled for September 4, 2023.
The dispute between the two parties revolves around an arbitration award. CONCOR had issued a tender for the supply and commissioning of reach stacker machines, and Roadwings International emerged as the successful bidder. However, disagreements arose, leading to arbitration. The Arbitral Tribunal ruled in favor of Roadwings International, ordering CONCOR to pay Rs 81.36 crore.
Following the arbitration award, Roadwings International issued a demand notice on July 15, 2022. In response, CONCOR disputed the notice and expressed its intention to challenge the Arbitral Award in the High Court.
Subsequently, Roadwings International approached the NCLT as an operational creditor under the Insolvency & Bankruptcy Code. The NCLT admitted the plea on July 12, considering it a valid case for initiating CIRP against CONCOR. An interim resolution professional (IRP) was appointed to oversee CONCOR's operations during the CIRP.
The NCLT also noted that CONCOR had approached the Delhi High Court after the insolvency proceedings had commenced, and there was no pre-existing dispute at the time of the demand notice from the operational creditor.
CONCOR appealed the NCLT's order before the NCLAT, with the Solicitor General of India, Tushar Mehta, representing CONCOR during the proceeding. He mentioned that the matter was already before the high court and scheduled for a hearing on August 29, 2023, concerning the limitations issue. The NCLAT took note of this fact.
The NCLAT clarified that the stay on insolvency proceedings does not impact the proceedings pending in the High Court, which will proceed as per the law.
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