The National Company Law Appellate Tribunal (NCLAT) Friday agreed to hear a petition filed by a Dutch court administrator in the Jet Airways insolvency case as it stayed parts of a lower court order that declared overseas bankruptcy proceedings null and void.
Jet is facing insolvency proceedings in the Netherlands as well where it was declared bankrupt after it failed to pay two European creditors. Subsequently, a bankruptcy administrator was appointed by the Dutch court.
A three-member NCLAT bench headed by Justice S J Mukhopadhyay said it will clarify the law on action to be taken when there are two insolvency petitions filed against the same company in two different countries. At the proceedings, the Dutch administrator agreed not to sell the confiscated assets of the debt-ridden Jet Airways.
The NCLAT issued notice to the consortium of Jet Airways lenders and directed them to file their reply within two weeks. It fixed August 21 as the next date of hearing. The Dutch bankruptcy administrator could also “collate the claims of Offshore Creditors including financial creditors, operational creditors and other stakeholders” of Jet Airways and forward their details to the resolution professional (RP) of the defunct airline, the NCLAT said.
Last month, while admitting State Bank of India’s insolvency plea against Jet Airways, the Mumbai-bench of the National Company Law Tribunal (NCLT) had rejected the Dutch administrator’s plea to recognise their proceedings.
The grounded airline owes more than Rs 8,500 crore to lenders. It also has a large debt by way of accumulated losses to the tune of Rs 13,000 crore, vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore.
“First Respondent (SBI) may file a reply affidavit suggesting the procedure that may be followed in the facts and circumstances of the case, without any conflicting interest of stakeholders of both the countries,” said NCLAT.
The appellate tribunal further said that “during the pendency of this Appeal, the Appellant Administrator (Dutch bankruptcy) and 2nd Respondent – ‘Interim Resolution Professional’ will cooperate with each other”.
“It will be open to the Appellant 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,” the bench said.
The NCLAT stayed a part of the order passed by the Mumbai bench of the NCLT, which had in June dismissed the Dutch administrator’s plea saying that offshore proceedings are not maintainable.
During the proceedings, the Dutch bankruptcy administrator also assured NCLAT that it would not sell or transfer Jet Airways’ seized properties in the Netherlands, which was the European hub of Jet Airways.
“Sumant Batra, Counsel appearing on behalf of Appellant Administrator assured that the Appellant Administrator will cooperate in the proceedings pending in India and will not sell, alienate, transfer, lease or create any third party interest on the offshore movable and immovable assets of the ‘Corporate Debtor’ [Jet Airways (India) Limited], which are or may be taken in his possession,” the NCLAT noted.
The NCLAT has also directed RP of Jet Airways to “ensure that ‘Corporate Debtor’ remains a going concern and will take the assistance of the (suspended) Board of Directors, paid Director and the employees.”
“The person who is authorised to sign the bank cheques may issue cheques only after authorisation of the IRP. The bank accounts of the Corporate Debtor be allowed to be operated for the day-to-day functioning of the Company…,” it added.
The NCLAT’s direction came over the appeal filed by the Dutch bankruptcy administrator, challenging the order of the NCLT.
Jet Airways is facing insolvency proceedings in the Netherlands and was declared bankrupt in response to a complaint filed by two European creditors.
In April, H Esser Finance Company and Wallenborn Transport had filed a petition citing unpaid claims worth around Rs 280 crore. Following this, a trustee in charge was appointed by the Dutch court and it had approached its Indian counterpart for access to the financials as well as assets of the airline. One of the Jet Airways aircraft, parked in the Schiphol Airport in Amsterdam, has already been seized. Jet Airways, which has not flown since April 18, is going through insolvency proceedings in India as well.
Source: Financial Express, July 13, 2019