Madras High Court Grants Liberty to Al Tirven Steels to File Claims with Liquidator Amidst Procedural Overlaps
Court Orders Petition Under Arbitration Act to be Treated Under IBC, Directs Liquidator to Consider Claims
In a significant ruling, the Madras High Court, presided over by Justice N. Anand Venkatesh, has provided a vital legal directive allowing M/s. Al Tirven Steels Ltd. to file its claims with the Liquidator of M/s. IVRCL Assets and Holding Ltd. amidst procedural complexities involving overlapping statutory provisions. The court's decision, delivered on September 18, 2025, effectively reclassifies a petition initially lodged under Section 34 of the Arbitration and Conciliation Act, 1996, as an application under Section 14(2) of the same Act, due to procedural overlaps with the Insolvency and Bankruptcy Code, 2016 (IBC).
The case originated from a challenge by Al Tirven Steels against an arbitral order dated January 9, 2019, which was initially filed under the Arbitration Act. However, during the proceedings, it became evident that the matter had significant intersections with ongoing insolvency proceedings under the IBC, particularly concerning the liquidation of IVRCL Limited, the holding company of IVRCL Assets and Holding Ltd.
Justice Venkatesh acknowledged the procedural confusion, emphasizing the necessity for clarity regarding the overlap between the arbitration proceedings and the insolvency process. He granted liberty to Al Tirven Steels to present its claims before the Liquidator of IVRCL in accordance with the law, considering the petitioner's lack of awareness of the NCLT proceedings and the subsequent developments in the case.
The Court directed that the Liquidator consider Al Tirven's claims on their merits and complete the process within three months of receiving the claim. This decision underscores the judiciary's flexibility in navigating complex intersections of arbitration and insolvency laws, ensuring that procedural technicalities do not impede substantive justice.
The judgment also referenced significant case law, including the Chennai Metro Rail Limited v. Lanco Infratech Limited, and RPS Infrastructure Limited v. Mukul Kumar, highlighting the judiciary's evolving stance on the interplay between arbitration awards and insolvency proceedings.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Petition under Section 34 - Treated as an application under Section 14(2) due to procedural overlap - Liberty granted to petitioner to file claim before Liquidator under IBC, considering subsequent developments and lack of awareness about NCLT proceedings.
Statutory Provision(s): Arbitration and Conciliation Act, 1996 Section 34, Section 14(2); Insolvency and Bankruptcy Code, 2016 Section 33(5)
