SUPREME COURT : In Alchemist Asset Reconstrution Company Ltd. vs. M/s. Hotel gaudavan pvt. Ltd. & Ors.

Arbitration that has been instituted after the moratorium is non est in law pursuant to Section 14(1)(a).

The mandate of the new Insolvency Code is that the moment an insolvency petition is admitted, the moratorium that comes into effect under Section 14(1)(a) expressly interdicts institution or continuation of pending suits or proceedings against Corporate Debtors. This being the case, we are surprised that an arbitration proceeding has been purported to be started after the imposition of the said moratorium and appeals under Section 37 of the Arbitration Act are being entertained. Therefore, the order of the District Judge dated 06.07.2017 and further state that the effect of Section 14(1)(a) is that the arbitration that has been instituted after the aforesaid moratorium is non est in law.

Link : https://www.sci.gov.in/supremecourt/2017/21052/21052_2017_Order_23-Oct-2017.pdf