A two-member Bench headed by Chairperson Justice S.J. Mukhopadhyay and Justice Bansi Lal Bhat of the National Company Law Appellate Tribunal has reserved its verdict in a batch of appeals moved against the approval of ArcelorMittal’s resolution plan for Essar Steel. The Bench has hinted it would restrict its scrutiny to the distribution of the money promised in the plan.The Appellants...
A two-member Bench headed by Chairperson Justice S.J. Mukhopadhyay and Justice Bansi Lal Bhat of the National Company Law Appellate Tribunal has reserved its verdict in a batch of appeals moved against the approval of ArcelorMittal’s resolution plan for Essar Steel. The Bench has hinted it would restrict its scrutiny to the distribution of the money promised in the plan.
The Appellants before the National Company Law Appellate Tribunal included Standard Chartered Bank, erstwhile Directors of Essar Steel, Prashant Ruia, Dilip Oommen, and Rajiv Bhatnagar and stakeholder Essar Steel Asia Holding as well as several operational creditors. After the National Company Law Tribunal Ahmedabad Bench approved ArcelorMittal’s Rs.42,000 crore plan for Essar Steel on March 8, quick appeals against the orders were preferred.
Standard Chartered Bank (SCB) has challenged ArcelorMittal’s resolution plan saying the approval process adopted by the Committee of Creditors (CoC) was illegal and discriminatory. Its main argument is that the CoC headed by the State Bank of India (SBI) did not consult it while approving the resolution plan. SCB has held that this has resulted in SCB being offered a meager amount of 1.7% of its claim amount as against other financial creditors of Essar getting as much as 92% of their claim. SCB has also alleged that ArcelorMittal has reduced its proposal of an upfront payment of Rs.42,000 crore to Rs.39,500 crore.
Further, the erstwhile directors of Essar Steel have questioned the process adopted by the CoC while approving ArcelorMittal’s resolution plan saying they did not receive copy of the resolution plan. The Appellant Operational Creditors (Ocs) have admitted claims of over Rs.260 crore have received zero amount in the resolution plan. Equitable recovery in the ratio of 85:15 between the Financial Creditors and Operational Creditors is being sought.
CoC has defended the distribution of the money by stating that the same was done based on the status of the creditor.
Senior Advocate Kapil Sibal appeared for Standard Chartered.
Senior Advocate Harish Salve appeared for ArcelorMittal.
Senior Advocates Ravi Kadam and G.S. Subramanian represented CoC.
Senior Advocate Sanjiv Sen with Advocate Anand Verma represented the OCs.
Senior Advocate UK Chaudhary appeared for Prashant Ruia.
Senior Advocate Harin P. Rawal, appearing for Essar Steel Asia Holdings.