Supreme Court hears case on post-CIRP arbitration for OCs

The case concerns whether an Operational Creditor (OC) who suffered a significant reduction in their claim during a Corporate Insolvency Resolution Process (CIRP) can be sued by the Successful Resolution Applicant (SRA) for pre-CIRP dues in a post-CIRP arbitration. The core issue is whether the arbitration agreement survives the approval of the resolution plan and if the SRA can pursue claims that were not raised as counterclaims during the CIRP.

Who it concerns: Appellant: Modern Asset; Respondent: KNK Construction Private Limited; Bench: Justice K. Vinod Chandran.

What the court decided

• The Court noted the High Court's impugned order which appointed an Arbitrator and directed the parties to approach the Karnataka Mediation Centre first.
• The Court recorded the arguments of both parties regarding the 'clean slate' principle, the survival of the arbitration agreement, and the scope of Section 11 of the Arbitration and Conciliation Act.
• The Court listed the six questions framed and answered by the High Court in the impugned order, which included findings that the arbitration agreement survives the resolution plan and that substantive objections should be left to the Arbitral Tribunal.

Also in the document

• The judgment text provided is truncated and ends while listing the High Court's answers to the framed questions; it does not contain the Supreme Court's final decision, final order, or any specific relief granted or denied by the Supreme Court itself.
• The case is marked as 'Non-Reportable' and is a Civil Appeal arising from a Special Leave Petition.
• The appellant's claim was reduced from Rs.12,26,30,840/- to Rs.8,82,942/- in the resolution plan.