28 Sep 2019 5:10 AM GMT
The NCLAT has given its nod to offshore proceedings in the Jet Airways insolvency case by allowing the Administrator, Rocco Mulder, appointed by Dutch Insolvency Court (Trustee) to participate in the meetings of the Committee of Creditors (CoC). The Appellate Tribunal was dealing with cross border insolvency in the matter, as insolvency proceedings were initiated against the...
The NCLAT has given its nod to offshore proceedings in the Jet Airways insolvency case by allowing the Administrator, Rocco Mulder, appointed by Dutch Insolvency Court (Trustee) to participate in the meetings of the Committee of Creditors (CoC).
The Appellate Tribunal was dealing with cross border insolvency in the matter, as insolvency proceedings were initiated against the airlines in India as well as Netherlands.
The Administrator had prayed that parallel proceedings against the airlines would hurt the object of insolvency proceedings, and had requested for staying the insolvency proceedings in India. NCLT Mumbai had rejected the Administrator's prayer with the finding that the 'Dutch Court' had no jurisdiction in the matter of 'corporate insolvency resolution process' of 'Jet Airways (India) Limited, (Offshore Regional Hub, Holland).
The Administrator approached the NCLAT against NCLT's finding by way of an appeal.
When the appeal came up before the NCLAT, the question framed for consideration was whether separate proceeding(s) in 'Corporate Insolvency Resolution Process' (CIRP) against Jet Airways (India) Ltd.), could take place in two different countries, one having no territorial jurisdiction over the other.
In its earlier order, the Appellate Tribunal had clarified its intent to have a joint CIR process against Jet Airways, against which two proceedings have been initiated – one in India and another in Holland. It was observed by the NCLAT that the control and custody of assets of Jet Airways situated outside the country could only be taken with an arrangement with the Administrator of Jet Airways, Offshore Regional Hub (Holland). The Interim Resolution Professional (IRP) was asked to collate the claim of all the offshore creditors after reach an arrangement with the Administrator, appointed pursuant to the insolvency proceeding initiated at Holland against Jet Airways. The question whether the CoC has any role left to play, was left open.
Following the direction of the NCLAT, the Bench was informed in the last hearing that the Dutch Administrator, the Resolution Professional, as well as the CoC had reached an agreement for settlement termed as 'Cross Border Insolvency Protocol', except for one clause. The clause being disagreed upon was regarding the participation of the Administrator in the CoC meetings.
The Administrator wanted to insert the clause that allowed him to participate in the CoC meetings, whereas, the settlement proposed by the RP, on the instructions of the CoC, provided for exclusion of the Administrator from the CoC meetings.
After hearing the parties, the NCLAT has held that 'The Dutch Trustee' is equivalent to the 'Resolution Professional' of India, and as per law, has a right to attend the CoC meetings. However, to avoid overlapping of powers, the Appellate Bench directed that the Dutch Trustee shall be invited to participate in the meetings of the CoC as an observer but shall not have a right to vote.
The NCLAT Bench also clarified CoC has no role to play as the agreement reached between the Dutch Administrator and the RP of India, is on the basis of the direction of this Appellate Tribunal. With the aforesaid view, the draft of 'Cross Border Insolvency Protocol' agreement was finalized. Further, the order passed by the NCLT, Mumbai, in so far as it was related to the observation that the 'Dutch Court' has no jurisdiction in the matter of CIR process of Jet Airways (Offshore Regional Hub), was set aside.
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