NCLAT confirms agreement between Dutch court and Jet resolution professional

The National Company Law Appellate Tribunal (NCLAT) has approved an agreement between a Dutch court and the Resolution Professional looking into the insolvency process of the debt-ridden carrier – Jet Airways. A three member NCLAT bench said that the Dutch administrator would be part of the Committee of Creditors (CoC) meeting and would be given minutes of the meetings.

The Appellate Tribunal set aside the earlier order of the Mumbai bench of the National Company Law Tribunal (NCLT), which had denied to recognize the Dutch insolvency proceedings.

The Dutch authority has been allowed to initiate liquidation of Jet assets in the Netherlands Under the agreement. However, the administrator appointed by the Dutch court shall seek inputs, notify and consult the Resolution Professional. The Appellate Tribunal order came after the Resolution Professional of Jet Airways and Dutch Court Administrator agreed to co-ordinate in the insolvency proceedings ongoing in India. The Dutch trustee will take into consideration the Indian proceedings prior to any material decision being taken in the Dutch proceedings.

Jet Airways was declared bankrupt in a Netherlands court after two European creditors filed a complaint against the airline. However, the Mumbai bench of NCLT had declared the overseas bankruptcy proceedings null and void. The Dutch Court Administrator filed a petition with the NCLAT against the order of NCLT. NCLAT asked the Resolution Professional of Jet Airways to co-operate with the Dutch Court Administrator, which is also conducting insolvency proceedings against the airline.

The NCLAT had clearly stated that the CoC, led by State Bank of India, has no role to play as the agreement reached between the Dutch administrator and the Resolution Professional of India is on the basis of the direction of the appellate tribunal.

According to NCLAT, the CoC intervened with the matter and put its view to the Resolution Professional despite its order, which resulted in difference of opinions. ‘The Dutch trustee’ is equivalent to the ‘Resolution Professional’ of India, therefore, as per law, has the right to attend the meeting of the ‘committee of creditors”.

The debt-ridden 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. The consortium of lenders is led by the State Bank of India.