The Intersection Between Arbitration And Insolvency Proceedings

Asst. Prof Vaibhav Dharod, Dy Patil Deemed to be University, School of Law

Lavanya Panicker, Dy Patil Deemed to be University, School of Law

I. ABSTRACT

This comprehensive analysis explores the complex interplay between arbitration and insolvency proceedings in the Indian legal landscape. Authored by Justice Dhanuka and Asst. Prof Sailee Bhosale, the study delves into the implications of the moratorium order issued by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) of 2016. The authors scrutinize existing legal frameworks, court decisions, and the legislative landscape to unravel the challenges posed by the apparent conflict between bankruptcy and arbitration laws.

The study navigates through fundamental concepts of the Corporate Insolvency Resolution Process (CIRP) and scrutinizes the evolving significance of merging arbitration and insolvency. Notably, it discusses key court decisions, such as the Indus Biotech case, emphasizing the supremacy of the IBC and the duty of the Adjudicating Authority to consider both IBC and the Arbitration Act. The analysis extends to judicial interpretations of the term "actions in rem" and the powers of the Resolution Professional, highlighting the transformative objectives of the IBC in unifying insolvency law.

Examining the moratorium's origin and objectives, the study clarifies its role in providing a "calm period" for corporate debtors to reorganize during insolvency resolution. The authors scrutinize the impact of the moratorium at various stages of arbitration proceedings, addressing nuances in pre-award and post-award scenarios. A critical exploration of exceptions to the moratorium, including its applicability to constitutional powers and criminal proceedings, adds depth to the analysis.

The authors emphasize the need for legislative intervention to address practical and legal challenges arising from the intersection of insolvency and arbitration. The study concludes by advocating for explicit legislative provisions that can bring clarity, predictability, and uniformity to the complex relationship between these two legal domains. This research serves as a valuable resource for legal practitioners, policymakers, and scholars grappling with the intricate dynamics of arbitration and insolvency proceedings in the post-Covid era.