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Can MSME arbitration proceed if NCLT declares moratorium against one party? Bombay High Court to decide

The Court was considering a writ petition filed by the Resolution Professional for Ainwesha Engineering & Projects.

The National Company Law Tribunal, Ahmedabad had initiated Corporation Insolvency Resolution Proceedings (CIRP) against the petitioner company and a moratorium had been imposed as per the Insolvency and Bankruptcy Code (IBC).

The grievance was that the MSME Authority passed an order directing the petitioner company to pay an amount of ₹2,91,43,430 in a plea filed by the respondent company Insteel Engineering Pvt Ltd.

The petitioner-company, however, raised the grievance that despite informing the authority about the initiation of CIRP and imposition of moratorium, the Council passed an award in an ongoing arbitration dispute.

They claimed that MSME Council “grossly erred” in passing the order under challenge by consciously ignoring the intimation of the initiation of CIRP and the mandated moratorium on all suits and other proceedings pending against the petitioner company.

Source: Barandbench

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