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TMI Blog2022 (5) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the respondent (then known as Monnet Ispat and Energy Limited) had entered into a Production Sharing Contract dated 30.08.2012 (hereafter the 'PSC') with the Government of India in respect of the Contract Area identified as Block: CB-ONN-2010/8. 3. Thereafter, the members of the consortium [BPRL, GAIL (India) Limited, Engineers India Limited, BF Infrastructure and the respondent] entered into the Agreement for carrying out joint operations under the PSC. BPRL and GAIL (India) Limited were jointly designated as Operators with BPRL being accepted as the Lead Operator to carry out the joint operations pursuant to the Agreement. 4. BPRL claims that the operations were required to be conducted in conformity with an approved work program and within approved budget. The finances for the operations were to be provided by the consortium partners including the respondent. 5. BPRL raised various Cash Calls on the consortium partners including the respondent. BPRL claims that the respondent failed to comply with the Cash Call of Rs.12,11,62,887/- (Cash Call No.12) and the Cash Call of Rs.17,03,72,749/- (Cash Call No. 14). As a consequence of the aforesaid defaults, BPRL issued a Default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability for operating the PSC. 13. In the aforesaid context, BPRL issued a notice dated 09.07.2021 under Section 21 of the A&C Act invoking the Arbitration Clause (Article 19.3 of the Agreement) and appointed Justice (Retired) V.K. Gupta as its nominee arbitrator. BPRL also called upon the respondent to appoint its nominee arbitrator within a period of thirty days of the receipt of the notice. However, the respondent has failed to do so. 14. The respondent responded to the notice dated 09.07.2021 denying any liability for making any payments. The respondent claims that in terms of the approved Resolution Plan, all rights, obligations, claims arising in respect of the Agreement stand extinguished and insofar as the respondent is concerned, the Agreement does not survive. 15. Article 19.3 of the Agreement embodies an Arbitration Agreement which reads as under: "19.3 Resolution of disputes through Arbitration: 19.3.1 Subject to the provisions of this Agreement, the Parties hereby agree that any controversy, difference, disagreement or claim for damages, compensation or otherwise (hereinafter in this Clause referred to as a "Dispute") arising between the Parties in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs are pending before the arbitral tribunal. 19.3.9 The decision of the arbitral tribunal shall be pronounced within four (4) months of the appointment of the last arbitrator to the Arbitral Tribunal unless otherwise extended by the Parties or by arbitral tribunal. The arbitral tribunal shall give a reasoned award in English in writing. 19.3.10 This arbitration agreement shall be governed by the Arbitration and Conciliation Act, 1996 and any amendments thereto or further enactments thereof prior to submitting a dispute to arbitration, the Parties may by mutual agreement submit the matter for conciliation as per Art.19.2.1 of this Agreement and in accordance with Part III of the Arbitration and Conciliation Act,1996 and any amendments thereto or further enactments thereof. 19.3.11 The venue of the arbitration proceedings pursuant to this Article, unless the Parties agree otherwise, shall be New Delhi, India and shall be conducted in the English language. 19.3.12 The right to arbitrate disputes under this Agreement shall survive expiry or the termination of this Agreement and the Contract. Insofar as practicable, the Parties shall continue to implement the terms of this Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed, on the Existing Promoters of the Company or any existing or former members of the management of the Company, in relation to any period prior to the Acquisition or arising on account of the Acquisition, then by virtue of the order of the NCLT approving this Resolution Plan, any subrogation or other rights or claims that such Existing Promoters or existing or former members of the management of the Company may have against the Company at any time in respect of such claims, demands, liabilities or obligations, whether under law, equity or contract, whether admitted or not, due or contingent, crystallised or uncrystallised, known or unknown, secured or unsecured, disputed or undisputed, present or future, whether or not set out in the AIL Statement, the balance sheets of the Company or the profit and loss account statements of the Company or the February 21 Creditor List, in relation to any period prior to the Acquisition or arising on account of the Acquisition, shall stand automatically waived and extinguished in full and the Company and/ or the Consortium shall at no point of time be, directly or indirectly, held responsible or liable in relation thereto." 18. He submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2020) 8 SCC 531 in support of his aforesaid contention. 23. Mr Jayant Mehta, learned senior counsel appearing for BPRL countered the aforesaid contentions. He submitted that the scope of examination under Section 11 of the A&C Act was limited and it was not necessary for this Court to examine the disputes between the parties since the arbitration agreement was not disputed. Thus, an arbitrator was required to be appointed for constitution of an Arbitral Tribunal. 24. Mr Mehta referred to paragraph 11 of the order dated 24.07.2018 passed by the NCLT, Mumbai. He stated that said order expressly indicated that only the liabilities and obligations of the respondent prior to the ICD were extinguished. He submitted that there was no dispute that a creditor is precluded from initiating any proceedings in respect of a claim which is not a part of the Resolution Plan or one that was not preferred at the relevant time. However, the said principle is not applicable to claims that become due after the ICD. He submitted that since the claims raised by BPRL related to a period after the ICD, it was not precluded from seeking adjudication of its claim and recovery of the amounts claimed by it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the language of Section 11(6-A) of the 1996 Act. To my mind, once the Court is persuaded that it has jurisdiction to entertain a Section 11 petition all that is required to examine is as to whether or not an arbitration agreement exists between the parties which is relatable to the dispute at hand. The latter part of the exercise adverted to above, which involves correlating the dispute with the arbitration agreement obtaining between the parties, is an aspect which is implicitly embedded in sub-section (6-A) of Section 11 of the 1996 Act, which, otherwise, requires the Court to confine its examination only to the existence of the arbitration agreement. Therefore, if on a bare perusal of the agreement it is found that a particular dispute is not relatable to the arbitration agreement, then, perhaps, the Court may decline the relief sought for by a party in a Section 11 petition. However, if there is a contestation with regard to the issue as to whether the dispute falls within the realm of the arbitration agreement, then, the best course would be to allow the arbitrator to form a view in the matter. 108. Thus, unless it is in a manner of speech, a chalk and cheese situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o any amount payable during the 'Corporate Insolvency Resolution Process'. 32. 'Bharat Petroresources Limited' submitted its claim on 5th January, 2018 towards the 'operational debt' amounting to Rs.9,58,88,886/- as on the Insolvency Commencement Date, which has been admitted by the 'Resolution Professional'. Therefore, any claim of the Appellant towards future claim accrued after the Insolvency Commencement Date, cannot be considered under Section 18(1) (b) by the 'Resolution Professional'. 33. If any cost incurred during the 'Corporate Insolvency Resolution Process' that cannot be treated to be the claim of an 'Operational Creditor' and therefore, further claim amounting to Rs.9,92,86,892/- towards future claim made by 'Bharat Petroresources Limited' was rightly not collated by the 'Interim Resolution Professional'/'Resolution Professional'. 34. For the reason aforesaid merely on the ground that the future claim has not been collated by the 'Resolution Professional', the Appellant- 'Bharat Petroresources Limited' cannot assail the order of approval of plan (dated 25th July, 2018) passed under Section 31 of the 'I&B Code'. 34. It is apparent from the above that NCLAT was of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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