The National Company Law Appellate Tribunal permits the committee of creditors to guide the resolution professional of Jet Airways India Limited to discharge his duties in relation to foreign creditors
By INSOL INDIA EDITORIAL BOARD Posted On : September 18, 2019
Two separate corporate insolvency resolution process (“CIRPs”) proceedings have been initiated against Jet Airways (India) Limited (“Jet”), one in India where the registered office of Jet is situated and one in Netherlands (North Holland) having the regional hub of Jet. The National Company Law Appellate Tribunal (“NCLAT”), in its order dated July 12, 2019, had directed the administrator in Netherlands (“Administrator”) and the resolution professional (“RP”) in India to cooperate with each other and stated that it will be open to the Administrator to collate the claims of offshore creditors including financial creditors, operational creditors and other stakeholders and forward their details to the RP for the purpose of preparing the information memorandum with the approval of the committee of creditors of Jet (“COC”).
Subsequently, the NCLAT in its order dated August 21, 2019, held that it intends to have a joint CIRP proceeding and the COC was directed to inform the NCLAT, if the COC will give the same treatment to the creditors who are a part of the CIRP in Netherlands, as given to similarly situated foreign creditors who are also entitled to file their claims with the RP, subject to collation by the Administrator.
In this regard, the NCLAT held that it is the duty of the RP to collate the claims of creditors, both domestic and international and take over control and custody of the assets of Jet for giving effect to his duties. To discharge his duties, the RP is required to reach an arrangement with the Administrator who will help the RP collate claims of foreign creditors and take custody of the assets based in Holland. To facilitate this setup, the NCLAT without deciding the ambit of the COC in cases like these, allowed the CoC to guide the RP to enable him to prepare a draft agreement showing the terms and conditions to take up the matter with the Administrator in Netherlands for his consent to the agreement. The NCLAT further pronounced that once the Administrator consents to the agreement, it will be subject to NCLAT’s final approval.