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of <h1>Tribunal dismisses CIRP petition due to pre-existing disputes in Charter Party Agreement</h1> <h3>Maxsun Marine services FZE Versus Dolphin Offshore Enterprises (India) Limited</h3> Maxsun Marine services FZE Versus Dolphin Offshore Enterprises (India) Limited - TMI Issues Involved:1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Sections 8 and 9 of the Insolvency & Bankruptcy Code (IBC).2. Alleged default in payment of dues by the Corporate Debtor.3. Existence of pre-existing disputes between the parties.4. Validity of the termination of the Charter Party Agreement.5. Counterclaims and deductions asserted by the Corporate Debtor.Detailed Analysis:1. Initiation of Corporate Insolvency Resolution Process (CIRP):The Petitioner, Maxsun Marine Services FZE, filed a company petition seeking to initiate the CIRP against the Corporate Debtor, Dolphin Offshore Enterprises (India) Limited, alleging a default in payment amounting to Rs. 7,05,91,755/- excluding interest at 5% p.a. under Sections 8 and 9 of the Insolvency & Bankruptcy Code (IBC), read with Rule 5 and 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016.2. Alleged Default in Payment of Dues:The Petitioner claimed that the Corporate Debtor failed to make payments despite several invoices and reminders. The invoices related to the charter of the vessel E. Francis for the months of June, July, August, September, and October 2016. The Petitioner also highlighted multiple instances where the Corporate Debtor acknowledged the debt and made partial payments.3. Existence of Pre-existing Disputes:The Corporate Debtor contested the petition by asserting that there were pre-existing disputes regarding the charter party agreement dated 16.12.2015. They cited various issues such as frequent crew strikes, breakdowns of machinery, deficiencies in the vessel, and counterclaims amounting to US $352,645.44/-. The Corporate Debtor argued that these disputes were genuine and substantial, thus negating the claim of operational debt due and payable.4. Validity of the Termination of the Charter Party Agreement:The Petitioner terminated the Charter Party Agreement on 18.09.2016 due to the Corporate Debtor's failure to clear outstanding dues and provide necessary port clearance documents. The Corporate Debtor, however, disputed the validity of this termination, arguing that it was based on vague and invalid points and that there were ongoing disputes at the time of termination.5. Counterclaims and Deductions Asserted by the Corporate Debtor:The Corporate Debtor presented several counterclaims and deductions during a meeting held on 19.08.2016. These included costs related to idle time, operational day rates, marine crew expenses, fuel, repairs, and other operational costs. The Corporate Debtor maintained that these issues were indicative of a pre-existing dispute, which was further substantiated by the minutes of the meeting.Conclusion:The Tribunal referred to the judgment of the Hon'ble Supreme Court in Mobilox Innovations Pvt. Ltd. v. Kirusa Software (P) Limited, which emphasized that an application under Section 9 of the IBC must be rejected if there is a record of dispute or a plausible contention requiring further investigation. The Tribunal concluded that there was indeed a pre-existing dispute between the parties, as evidenced by the minutes of the meeting and other communications. Consequently, the petition was dismissed.
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