Jet Airways is currently facing a lot of legal and financial turmoil. One of its legal issues is a case filed by European creditors against the company resulting in it declared as bankrupt and subsequent insolvency proceedings in the country of Netherlands.
The Dutch Administrator who oversaw the insolvency proceedings against Jet Airways in Netherlands, filed a petition before the Mumbai Bench of the National Company Law Tribunal (NCLT) seeking the National Company Law Tribunal to legally recognize the ongoing insolvency proceedings against Jet Airways. The National Company Law Tribunal (NCLT) however rejected this submission of the Dutch Administrator. The Dutch Administrator therefore filed an appeal to the National Company Law Appellate Tribunal.
The National Company Law Appellate Tribunal (NCLAT) in the present case was faced with a substantive issue of law that is primarily as what is the role of a foreign Administrator with respect to the Indian corporate structure especially in regard to insolvency proceedings. The National Company Law Tribunal (NCLAT) ruled that the role the Dutch Administrator in the present case is equivalent to that of Resolution Professional in India. The position of a Resolution Professional in India is mandated by Section 16(1) of the Insolvency and Bankruptcy Code 2016 (IBC 2016).
The National Company Law Appellate Tribunal (NCLAT) held that “In the present case, we make it clear that Committee of Creditors i.e. CoC has no role to play as the agreement was between the Resolution Professional and the Administrator on the basis of an Appellate Tribunal's direction. In spite of the same, the CoC interfered in the matter.”
It further held “we expect the Dutch Administrator to work in cooperation with Resolution Professional and if any suggestion is required, it would be suggested to the Resolution Professional.”
It thus allowed the Dutch Administrator to attend the Committee of Creditors (CoC). The Court also expected the Dutch Administrator to work in unison with the Resolution Professional and also suggest any changes to the Resolution Professional if the need arises.