Appeal Dismissed: No Recovery During Moratorium Period

The appeal was dismissed by the Appellate Tribunal, emphasizing that no recovery can be made during the moratorium period if the Corporate Debtor is found liable. The Tribunal held that the Adjudicating Authority lacks jurisdiction to interfere with arbitral tribunal orders during insolvency proceedings. It was clarified that the Insolvency and Bankruptcy Code supersedes the Arbitration and Conciliation Act, prohibiting arbitral proceedings during the moratorium. The Tribunal directed parties to halt arbitral proceedings and submit claims to the Resolution Professional, highlighting the need to comply with insolvency restrictions.

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Issues:
1. Interlocutory Application seeking relief in Corporate Insolvency Resolution Process.
2. Determination of counter claim during the period of Moratorium.
3. Jurisdiction of Adjudicating Authority over arbitral proceedings during insolvency.
4. Applicability of Insolvency and Bankruptcy Code over Arbitration and Conciliation Act.
5. Segregation of claim and counter-claim during insolvency proceedings.

Issue 1 - Interlocutory Application in Corporate Insolvency Resolution Process:
The Appellant, a Resolution Professional, filed an Interlocutory Application seeking directions for the Arbitral Tribunal to pronounce the final award in a dispute involving the Corporate Debtor to facilitate the Corporate Insolvency Process. The Appellate Tribunal disposed of the appeal, emphasizing that if the Corporate Debtor is found liable to pay, no recovery can be made during the moratorium period.

Issue 2 - Determination of counter claim during Moratorium:
The Adjudicating Authority refused to set aside an order allowing the Arbitral Tribunal to proceed with the counter claim during the moratorium period. The Appellate Tribunal held that the counter-claim cannot proceed during the moratorium, aligning with the decision in a similar case where it was observed that no recovery can be made during the moratorium if the Corporate Debtor is found liable.

Issue 3 - Jurisdiction over arbitral proceedings during insolvency:
The Appellate Tribunal clarified that the Adjudicating Authority has no jurisdiction to set aside orders passed by arbitral tribunals during insolvency proceedings. It was emphasized that all claims and counter-claims should be heard together by the Arbitral Tribunal, and no recovery can be made during the moratorium period.

Issue 4 - Applicability of Insolvency and Bankruptcy Code over Arbitration Act:
The Appellate Tribunal highlighted the Supreme Court's decision that the Insolvency Code prohibits the continuation of arbitral proceedings after the imposition of moratorium. It was held that the Insolvency and Bankruptcy Code prevails over the Arbitration and Conciliation Act, preventing arbitral proceedings during the moratorium period.

Issue 5 - Segregation of claim and counter-claim during insolvency proceedings:
While acknowledging that claim and counter-claim are separate proceedings, the Appellate Tribunal emphasized that they cannot proceed simultaneously during the moratorium period. The Tribunal directed parties to refrain from pursuing arbitral proceedings until the completion of the moratorium period and to file their claims with the Resolution Professional instead.

In conclusion, the appeal was dismissed as the Appellate Tribunal found no merit in the arguments presented, aligning its decision with previous judgments and emphasizing the importance of adhering to the restrictions imposed during the insolvency process.

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