18 March 2019: The National Company Law Appellate Tribunal today gave a conditional nod to ArcelorMittal’s resolution plan for debt-ridden Essar Steel.
Stating that there was no stay on the ArcelorMittal’s resolution plan, the Appellate Tribunal directed for the constitution of a Monitoring Committee to “ensure that Essar Steel remains a going concern”.
The Committee would be headed by the Resolution Professional who would implement ArcelorMittal’s Resolution Plan in accordance with law.
The implementation is, however, subject to the final outcome of the proceedings before the Appellate Tribunal, it was clarified.
The order was passed by a two-member Bench of the Appellate Tribunal, headed by Chairperson Justice SJ Mukhopadhaya while hearing a batch of appeals moved against the approval of ArcelorMittal’s resolution plan for Essar Steel.
Apart from allowing the Resolution Professional to disperse the amount promised in the Rs. 42,000 Resolution Plan, the Appellate Tribunal today also directed the Insolvency and Bankruptcy Board of India to file an affidavit stating the average payment received by a corporate debtor’s financial and operational creditors in a corporate insolvency resolution process.
The Appellate Tribunal also directed Standard Chartered, one of the appellants against ArcelorMittal’s resolution plan, to establish if it was entitled to the amount being claimed by it from Essar Steel, given that Essar Steel was only a guarantor and not the principal debtor.
“They (Essar Steel) had given a guarantee.. Have they (Standard Chartered) invoked the guarantee prior to the moratorium? .. Are you (Standard Chartered) entitled to any amount? You (Standard Chartered) are either entitled to no amount or equal amount.“
It has further directed the counsel appearing in the case to assist the Appellate Tribunal on whether creditors could be categorized into related and unrelated creditors. Standard Chartered Bank, has challenged that March 8 order of the National Company Law Tribunal Ahmedabad Bench approving ArcelorMittal’s resolution plan for Essar Steel, on the ground that the approval process adopted by the Committee of Creditors was illegal and that the plan was discriminatory.
The three erstwhile Directors of Essar Steel, Prashant Ruia, Dilip Oommen, and Rajiv Bhatnagar, have also moved the Appellate Tribunal against the approval of ArcelorMittal’s resolution plan.
Some of the operational creditors, including Surat-based Vinayak Road Carriers, have also moved intervention applications in the appeal. In its application filed through Advocate Anand Varma, Vinayak Road Carriers has also assailed the approval granted to ArcelorMittal’s resolution plan while seeking full payment of its dues.
The matter would be next heard on March 27.