Supreme Court Upholds Adani Power's Resolution Plan For Korba West Power

The Supreme Court upheld on Friday the decision of the National Company Law Appellate Tribunal, which had approved the resolution plan submitted by Adani Power Ltd. for Korba West Power Co.

There were no ambiguities in the findings of the appellate tribunal, as they reflect that the resolution plan, as approved, is binding on all the stakeholders and cannot be made the subject matter of arbitration or any other proceeding, the apex court said.

If NCLAT has permitted Shapoorji Pallonji & Co. to continue with the arbitration proceedings, it is only with regards to the quantification of their claims, and this will not affect the rights and obligations of the resolution applicant, Adani Power Ltd., the court said.

The top court made it clear that Adani Power cannot be held responsible for any other liability than what is mentioned in the resolution plan.

Last month, NCLAT upheld Adani Power’s resolution plan for Korba West Power under an insolvency process initiated by the latter.

An Ahmedabad bench of the National Company Law Tribunal, in 2019, approved the resolution plan submitted by Adani Power for the debt-ridden Korba West.

Certain arbitration proceedings were pending between Korba West Power and Shapoorji Pallonji, prior to the initiation of the insolvency process, and the amount that was claimed by Shapoorji Pallonji was Rs 45.22 crore.

However, after the approval of the resolution plan under the insolvency process, Shapoorji’s claims were rejected by the resolution professional under the insolvency code because of the pending arbitration proceedings. This prompted Pallonji to approach the NCLAT to challenge the resolution plan that was approved in 2019.

It was submitted by Adani Power that any claims, which are not part of the resolution plan, shall stand extinguished and no person would be entitled to continue any proceedings in respect of a claim, which is not part of the resolution plan.

Citing the apex court's judgement in the case of Fourth Dimension Solutions, NCLAT said that where the proceedings were pending before the arbitration authorities, the parties were at liberty to pursue all the contentions available to them at the relevant time.

Essentially, the top court had allowed the parties to pursue pending arbitration proceedings, if any, even after the approval of the resolution plan.

The appellate tribunal, while upholding the approval of the resolution plan, had held that Shapoorji Pallonji was at liberty to pursue all contentions available to them in the pending arbitration proceedings and that the same shall be decided in the said proceedings on its own merits in accordance with law.

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