Insolvency law prevails over Companies Act winding-up rules, and section 9 cannot be used to stop ongoing arbitration.

In liquidation under the Insolvency and Bankruptcy Code, the Court held that the Code prevails over inconsistent provisions of the Companies Act, 2013, and that section 33(5) bars fresh proceedings but does not require leave of the National Company Law Tribunal to continue pending arbitral proceedings. It further held that section 279 of the Companies Act applies to winding up under that Act, not liquidation under the Code. The Court also found that a section 9 application under the Arbitration and Conciliation Act, 1996 cannot be used to stay or suspend arbitral proceedings or bypass the statutory scheme governing tribunal jurisdiction and interim relief, so the request to halt the arbitration failed.

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Issues: (i) Whether leave of the National Company Law Tribunal was required to continue pending arbitral proceedings after liquidation of the corporate debtor. (ii) Whether an application under section 9 of the Arbitration and Conciliation Act, 1996 could be used to stay the arbitral proceedings on that ground.

Issue (i): Whether leave of the National Company Law Tribunal was required to continue pending arbitral proceedings after liquidation of the corporate debtor.

Analysis: The relevant provisions of the Insolvency and Bankruptcy Code, 2016 were held to govern liquidation proceedings. Section 33(5) bars institution of suits or legal proceedings by or against the corporate debtor after a liquidation order, but the provision does not speak of continuance of pending proceedings in the same manner as section 279 of the Companies Act, 2013. The Court held that section 279 of the Companies Act, 2013 applies to winding up under that Act and not to liquidation under the Code. In view of section 238 of the Code, the Code was treated as a special law overriding any inconsistent provision, and section 33(5) was held to prevail over section 279.

Conclusion: Leave of the National Company Law Tribunal was not required for continuance of the pending arbitral proceedings.

Issue (ii): Whether an application under section 9 of the Arbitration and Conciliation Act, 1996 could be used to stay the arbitral proceedings on that ground.

Analysis: Section 9 was held to be confined to interim protective measures and not to be a vehicle for setting aside or suspending a ruling already made by the arbitral tribunal on its jurisdictional objection. The Court also held that interference with arbitral proceedings is restricted by section 5 of the Arbitration and Conciliation Act, 1996, and that the tribunal's ruling could be tested in proceedings under the Act in the manner provided by law, not through the present section 9 application.

Conclusion: The section 9 application was not maintainable for the relief sought.

Final Conclusion: The request to halt the arbitration until leave from the National Company Law Tribunal was obtained failed, and the arbitral proceedings were permitted to continue without such leave.

Ratio Decidendi: In liquidation under the Insolvency and Bankruptcy Code, 2016, the Code prevails over inconsistent provisions of the Companies Act, 2013, and section 9 of the Arbitration and Conciliation Act, 1996 cannot be used to bypass the statutory scheme governing arbitral jurisdiction and interim relief.

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