06 March 2022, Sunday

2 years ago

Ground of nonarbitrability based on extinguishment of the claim post a resolution plan considered plainly arguable and an arbitrator appointed: Delhi High Court

11 February 2022 | Bharat Petroresources Ltd v. JSW Ispat Special Products Ltd | Arb P No 1154 of 2021 | Delhi High Court | Vibhu Bakhru J | 2022 SCC OnLine Del 443

Summarising and following the law laid down in Vidya Drolia (2021) 2 SCC 1 and subsequent cases, the Delhi High Court appointed an arbitrator because it believed that the ground of nonarbitrability was contentious.

The respondent had been earlier admitted into insolvency. Resisting the application for appointment, it argued that future claims not covered in the resolution plan stood extinguished. The petitioner had challenged the approval of the resolution plan in the NCLAT, but it was dismissed, noting that merely because the resolution professional did not collate future claims was not a ground to challenge the plan.

For the proposition that an arbitrator should be appointed if contentions of non-arbitrability are plainly arguable, the court cited Mohammed Masroor 2022 SCC OnLine SC 132 (decided on 02 February 2022).

Read the decision here.

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