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2021 (2) TMI 519 - HC - Insolvency and BankruptcySeeking extension of the mandate of the learned Arbitral Tribunal to conclude the arbitral proceedings and render award - Section 29A (5) of the Arbitration and Conciliation Act, 1996 - HELD THAT - A reading of the counter affidavit filed by the BSNL, indicates that the learned Arbitral Tribunal is also conscious of the pendency of the CIRP proceedings pending before the NCLT, and the question of whether the mandate of the Arbitral Tribunal still continues in view of the said proceedings. It appears that, on 3rd October, 2020, the learned Arbitral Tribunal had directed the parties to intimate the learned Arbitral Tribunal whether, in view of the provision of the IBC and the 1996 Act, the learned Arbitral Tribunal was authorised to proceed with the matter. The parties were also requested to place, on record, the orders passed by the NCLT, in that regard, as well as the decision taken by RP for reviving the arbitration case. The fact that the petitioner was approaching this Court under Section 29A(5) of the 1996 Act also stands noticed by the learned Arbitral Tribunal in its order dated 27th October, 2020. Section 29A(5) of the 1996 Act merely authorizes the Court to extend the mandate of the Arbitral Tribunal, on its expiry without completion of the arbitral proceedings. It is, no doubt, open to the respondent to question the maintainability of the petition preferred under Section 29A(5). Mr Tripathi has done so and, as opined hereinabove, the challenge fails to impress. All other issues, regarding the competence of the RP to represent the petitioner in the arbitral proceedings, or the impact, on the arbitral proceedings, of the proceedings pending before the learned NCLT or NCLAT, and the orders passed therein, would appropriately have to be addressed before the learned Arbitral Tribunal, and not before this Court, exercising jurisdiction under Section 29A(5). The submission merely requires to be stated, to be rejected. Para 4 of the resolution clearly approves the appointment of Mr. Anish Niranjan Nanavaty as the Resolution Professional. Mr. Tripathi has not been able to show me any provision in the IBC, which limits the authority of the Resolution Professional and does not authorize the Resolution Professional, overseeing the affairs of the Company, to apply for extension of the mandate of the Arbitral Tribunal or file the present petition - This Court, therefore, deems it appropriate to extend the mandate of the learned Arbitral Tribunal, as prayed in the petition, by a period of 12 months, with effect from 8th September, 2020. While doing so, this Court makes it clear that this Court has not expressed any final opinion on the proceedings before the IBC, the authority of Mr. Anish Niranjan Nanavaty as RP of the Company, or the effect on the arbitral proceedings, of the proceedings pending before the NCLT. All these aspects are left open and the learned Arbitral Tribunal would be at liberty to take a decision, as it deems appropriate after hearing the parties in that regard. The present petition stands allowed.
Issues Involved:
1. Competence of the petitioner to file the petition. 2. Extension of the mandate of the Arbitral Tribunal under Section 29A(5) of the Arbitration and Conciliation Act, 1996. 3. Impact of the COVID-19 lockdown on the proceedings. 4. Authority of the Resolution Professional (RP) under the Insolvency and Bankruptcy Code, 2016 (IBC). Detailed Analysis: 1. Competence of the Petitioner to File the Petition: The respondent questioned the competence of the petitioner, as RP, to file the present petition on behalf of the company, citing Section 12 of the IBC. According to the respondent, the RP's authority expired on 22nd June 2020, and no second extension could be granted under the first proviso to Section 12(3) of the IBC. The petitioner, however, argued that the lockdown extensions and orders from the NCLAT extended his mandate. The court found that it was not necessary to delve deeply into this controversy while exercising jurisdiction under Section 29A(5) of the 1996 Act. The court concluded that the petition was maintainable and should not be dismissed on this ground. 2. Extension of the Mandate of the Arbitral Tribunal: The petitioner sought an extension of the mandate of the Arbitral Tribunal to conclude the arbitral proceedings and render an award. The court noted that the arbitral proceedings were ongoing and that the respondent had not provided any sustainable ground to deny the extension. The court decided to extend the mandate of the Arbitral Tribunal by 12 months, effective from 8th September 2020. The court emphasized that it had not expressed any final opinion on the proceedings before the IBC, the authority of the RP, or the effect of the proceedings pending before the NCLT. 3. Impact of the COVID-19 Lockdown on the Proceedings: The petitioner cited various orders extending the lockdown in Maharashtra, arguing that these extensions impacted the timeline for the resolution process. The respondent countered that the lockdown was not in its complete form and that several offices were operational. The court acknowledged that the lockdown was, prima facie, continuing to some extent and noted that the NCLAT had ordered the exclusion of the lockdown period from the timeline for the resolution process. The court found that the lockdown and the orders from the NCLAT justified the petitioner's claim for an extension. 4. Authority of the Resolution Professional (RP) under the IBC: The respondent contended that the resolution of the Committee of Creditors (CoC) did not authorize the RP to file the petition or seek an extension of the Arbitral Tribunal's mandate. The petitioner argued that the RP's authority extended to these actions. The court rejected the respondent's objection, stating that the resolution clearly approved the appointment of the RP and that there was no provision in the IBC limiting the RP's authority to apply for an extension or file the petition. Conclusion: The court allowed the petition, extending the mandate of the Arbitral Tribunal by 12 months from 8th September 2020. The court clarified that it had not expressed any final opinion on the proceedings before the IBC, the authority of the RP, or the effect of the proceedings pending before the NCLT, leaving these issues to be addressed by the Arbitral Tribunal.
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