National Company Law Appellate Tribunal (NCLAT): While disposing of the appeal filed by Jet Airways (Offshore Regional Hub), a Bench of Justice S.J. Mukhopadhaya, Chairperson, and Justice A.I.S. Cheema, Member (Judicial), and Kanthi Narahari, Member (Technical), gave finality to the Terms and Conditions of the draft Cross Border Insolvency Protocol, entered into between the Resolution Professional of Jet Airways and the Dutch Trustee (Dutch equivalent of Resolution Professional — the administrator in bankruptcy of Jet Airways appointed by the Dutch Bankruptcy Court).
Jet Airways is subject to parallel insolvency proceedings in India and in Netherlands. In India, Corporate Insolvency Resolution Process has been initiated against Jet Airways. And in Netherlands, it has been declared bankrupt and a Dutch Trustee has been appointed to manage its estate. The NCLAT in its earlier order had directed the Resolution Professional, in consultation with the Committee of Creditors (“CoC”), to consider the possibility of a ‘Joint Corporate Insolvency Resolution Process’. By a subsequent order, the NCLAT had directed the Resolution Professional to reach an agreement with the Dutch Trustee and to extend cooperation to each other, pursuant to which the parties reached the instant Cross Border Insolvency Protocol in order to facilitate the proposed cooperation.
The Terms and Conditions of the Protocol were filed by the parties pursuant to the directions given by NCLAT. Each party had accepted all the clauses of the proposed Protocol. However, they did not agree upon Clause 6.1.2, which relates to the participation of the Dutch Trustee in the meetings of the CoC as an observer. The Dutch Trustee was insisting that he shall be invited to the meetings of CoC as an observer, however, without any voting rights. Per contra, the Resolution Professional asserted that the Dutch Trustee shall not be entitled to participate in the meetings of the CoC.
At the outset, the NCLAT made it clear that in the present case, the CoC had no role to play as the instant Protocol was reached between the parties pursuant to its directions. It also observed as unfortunate that in spite of the same, the CoC interfered with the matter and put its views to the Resolution Professional, which resulted in the difference of suggestions now before the NCLAT.
The NCLAT noted that the Dutch Trustee is equivalent to the Resolution Professional in India, and therefore, as per law, he has a right to attend the meetings of CoC. However, to avoid overlapping of power between them, the NCLAT was of the opinion that the suggestion given by the Dutch Trustee should be adopted. Therefore, it directed the inclusion of the following clause into the Protocol:
“6.1.2.—The Dutch Trustee shall be invited to participate in the meetings of the CoC as an observer but shall not have a right to vote in such meetings.“
The draft of the Cross Border Insolvency Protocol clause was, thus, made final. It was ordered that the same shall be treated as direction of the NCLAT and compliance of the order would be mandatory subject to other procedures required to be followed by the Insolvency and Bankruptcy Code, 2016.
The NCLAT also set aside that part of the Judgment passed by the National Company Law Tribunal, Mumbai, dated 20-6-2019, whereby it was observed that the Dutch Court has no jurisdiction in the matter of Corporate Insolvency Resolution Process of Jet Airways (India) Limited (Offshore Regional Hub), and the consequential directions as given to the Resolution Professional in respect of offshore proceedings.
However, it was made clear that the NCLAT had not interfered with the order of admission of the application under Section 7 IBC filed by the State Bank of India against Jet Airways (India) Limited. Therefore, the Joint Corporate Insolvency Resolution Process will continue in accordance with the Insolvency and Bankruptcy Code, 2016.
The appeal was disposed of accordingly. [Jet Airways (India) Ltd. (Offshore Regional Hub) v. SBI, Company Appeal (AT) (Insolvency) No. 707 of 2019, decided on 26-9-2019]