Arbitration Proceedings After The Imposition Of Moratorium Under S.14 Of Insolvency And Bankruptcy Code Is Non Est In Law: SC [Read Order]

In Alchemist Asset Reconstruction Company Limited v. M/s Hotel Gaudavan Private Limited, the Supreme Court bench comprising of Justices Rohinton Fali Nariman and Sanjay Kishan Kaul held that arbitration proceedings instituted after the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 is non est in law.In the instant case, NCLT had admitted a petition. In Alchemist Asset Reconstruction Company Limited v. M/s Hotel Gaudavan Private Limited, the Supreme Court bench comprising of Justices Rohinton Fali Nariman and Sanjay Kishan Kaul held that arbitration proceedings instituted after the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 is non est in law. Section 14 of the Code provides, inter alia, for declaration of moratorium by NCLT prohibiting the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. Allowing the appeal, the Hon'ble Supreme Court held the following: "The effect of Section 14 is that the arbitration that has been instituted after the aforesaid moratorium is non est in law".