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NCLAT dismisses appeal challenging operational creditor classification after resolution plan approval makes challenge infructuous NCLAT dismissed an appeal challenging NCLT's order that classified appellant as an operational creditor rather than financial creditor in an insolvency ...
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NCLAT dismisses appeal challenging operational creditor classification after resolution plan approval makes challenge infructuous
NCLAT dismissed an appeal challenging NCLT's order that classified appellant as an operational creditor rather than financial creditor in an insolvency proceeding. NCLT had partly allowed respondent's application, treating the foreign award decree holder as other creditor. The appellant's total admitted claim of Rs.132,89,75,268 was allocated only Rs.1 lakh in the approved resolution plan. NCLAT held that since the resolution plan incorporating NCLT's contested order was already approved, there was no occasion to consider the challenge to the classification order, making the appeal infructuous.
Issues Involved: The judgment involves issues related to the enforcement of a foreign arbitral award, the classification of a creditor, and the approval of a resolution plan under the Insolvency and Bankruptcy Code.
Enforcement of Foreign Arbitral Award: The Appellant, a Resolution Professional, challenged an order passed by the Adjudicating Authority regarding the admission of a claim by Rishima SA Investments LLC (Mauritius) based on a foreign arbitral award. The Adjudicating Authority held that Rishima should be treated as an "other creditor" rather than a financial creditor due to being a decree holder of a foreign award. The Resolution Professional contended that the arbitral award pending consideration in the Delhi High Court should not be equated with a court decree, and thus, Rishima's claim was rightly admitted for a nominal value of Re.1. The CoC supported the Resolution Professional's stance, arguing that a foreign award does not automatically equate to a decree.
Approval of Resolution Plan: Subsequent to the Adjudicating Authority's order partly allowing Rishima's application, a Resolution Plan submitted by a Successful Resolution Applicant was approved. The Resolution Plan allocated a nominal amount of Rs.1 Lakh against Rishima's total claim of Rs.132,89,75,268. The Adjudicating Authority's order was given effect in the approved Resolution Plan, and the Tribunal upheld the Resolution Plan, dismissing the appeal challenging the Adjudicating Authority's order. The Tribunal noted the amounts claimed, admitted, and provided under the Resolution Plan, affirming the allocation of Rs.1 Lakh against Rishima's claim.
Conclusion: The Tribunal concluded that with the approval of the Resolution Plan, which reflected the Adjudicating Authority's order, there was no need to further consider the challenge to the said order in the appeal. The appeal was dismissed, affirming the allocation of Rs.1 Lakh against Rishima's claim as per the approved Resolution Plan.
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