Arbitration Cannot Proceed Once IBC Moratorium Takes Effect: Madras High Court

The Madras High Court reaffirmed that arbitration proceedings cannot continue once liquidation proceedings have commenced under the Insolvency and Bankruptcy Code (IBC).

The Court emphasised that any order passed thereafter is legally unsustainable, as the moratorium under Section 14 of the IBC automatically stays such proceedings.

Justice N. Anand Venkatesh noted that the petitioner had not been informed about the initiation of liquidation and, therefore, allowed it to file its claim before the liquidator.

The Court directed the liquidator to consider the claim on its merits and conclude the process within three months.

[M/s. AL Tirven Steels Ltd. v M/s. IVRCL Assets & Holdings Ltd.]