2026 (3) TMI 1593 - AT - IBC

Terminated concession agreements cannot be compulsorily revived through CIRP enforcement; lawful conciliation or arbitration remains available.

A concession agreement terminated before commencement of CIRP could not be treated as capable of mandatory revival through the insolvency process. The ... Jurisdiction of the NCLT to issue direction to revive the Concession Agreement - request for revival of Concession Agreement​​​​​​​ - limits of resolution plan implementation - Implementation of resolution plan. Terminated concession agreement - A pre-CIRP concession agreement, already terminated and not revived, could not be directed to be revived or implemented through the approved resolution plan against the appellant. - HELD THAT: - The Tribunal held that there was no dispute that the concession agreement had stood terminated long before commencement of CIRP. Once so terminated, it did not form part of the CIRP estate in a manner that would permit the Adjudicating Authority to compel its revival through the resolution plan or by a subsequent implementation order. The appellant was also not a participant in the CIRP process, and therefore the direction requiring it to take steps in terms of the approved plan, insofar as it related to revival of the concession agreement, was beyond the permissible scope of the Adjudicating Authority's power. The Tribunal further clarified that neither the approval of the resolution plan nor the impugned order could be treated as issuing any binding direction to revive the terminated concession agreement. [Paras 11, 12, 13, 14] The impugned order was modified to the extent that no direction could be issued to the appellant to revive the concession agreement terminated prior to CIRP. Prayer for Revival of the conciliation process to which the Appellant is also agreeable - The Tribunal recorded the common position emerging before it that the respondent was pressing only for revival of the conciliation process, and that the appellant had no objection to such recourse provided the proceedings were undertaken in accordance with law and with liberty to raise all available pleas. On that basis, while declining any compulsory revival of the concession agreement, the Tribunal preserved the parties' contractual dispute-resolution remedies and directed that the appellant consider the respondent's request for conciliation or arbitration in accordance with law. [Paras 12, 13, 14] The parties were left free to take steps for conciliation or arbitration, and the appellant was to consider the respondent's request in accordance with law. Final Conclusion: The appeal was disposed of by modifying the impugned order and clarifying that neither the approved resolution plan nor the order of the Adjudicating Authority could compel revival of the concession agreement terminated before commencement of CIRP. The parties were left at liberty to pursue conciliation or arbitration in accordance with law. Issues: Whether the Adjudicating Authority could direct revival of a concession agreement that had been terminated before commencement of the CIRP, and whether the resolution plan could be enforced so as to compel such revival.Analysis: The concession agreement had been terminated years before the CIRP commenced and had not been revived thereafter. A contract already terminated could not be treated as part of the CIRP in a manner that enabled the Adjudicating Authority to compel its revival. The direction in the impugned order requiring implementation of the resolution plan could not extend to issuing a mandate to revive the terminated concession agreement. At the same time, the parties were left free to pursue conciliation or arbitration in accordance with law.Conclusion: The direction to revive the terminated concession agreement was held impermissible, and the appellant succeeded to that extent. The parties were permitted to take lawful steps for conciliation or arbitration, including consideration of any request for revival, but without any compulsory revival direction from the Tribunal.