NCLT approves ArcelorMittal Resolution Plan for Odisha Slurry Pipeline Infrastructure Ltd

The National Company Law Tribunal, Cuttack has approved ArcelorMittal’s Resolution Plan for Odisha Slurry Pipeline Infrastructure Ltd under the Insolvency & Bankruptcy Code. (IDBI Bank vs Odhisha Slurry Pipeline Infrastructure Ltd.).The order passed by a two-member Bench of Member (Judicial) Sucharitha R and Member (Technical) Satya Ranjan Prasad reads, "The Resolution Plan submitted by M/S ArcelorMittal India Pvt Ltd, the Resolution Applicant ..is APPROVED as per Section 31(1) of the Insolvency and Bankruptcy Code, 2016. Accordingly, the same shall be binding on the Corporate Debtor, its employees, members, creditors, including the Central Government, State Governments, or any local authority, guarantors and other stakeholders.".On May 14, 2019, the NCLT had initiated Corporate Insolvency Resolution Process against M/S Odisha Slurry Pipeline Infrastructure Ltd (Corporate Debtor)..Out of the two Resolution Applicants, M/s ArcelorMittal India Private Ltd and M/S Thriveni Earthmovers Private Ltd, the Resolution Plan submitted by the former was approved with 100% votes of the Committee of Creditors..SREI Infrastructure Finance Ltd, one of the financial creditors of the Corporate Debtors who was not allowed to participate in the CoC proceedings for being a related party, challenged the approval granted to ArcelorMittal. .SREI alleged that the CoC's decision to settle the principal portion of the secured as well as unsecured financial creditors as one class was "great injustice". It added that there was no maximization of assets through ArcelorMittal's Resolution Plan..Rejecting the objection, the NCLT opined that equal distribution of principal amount could not be termed as “unfair”. .The decision of repayment of principal dues to all the Financial Creditors is indeed “fair and Equitable”, it added..As far as the issue of SREI's non-participation in CoC meeting was concerned, NCLT observed that it would not have altered the outcome of the voting on the ArcelorMittal's Resolution Plan..It said, "The voting share of this applicant would have been 18%. There again assuming voted against the Resolution Plan, the Resolution Plan would have been approved with 82% voting in favour.." .SREI further challenged the Resolution Plan on the ground that the successful Resolution Applicant in the present case, ArcelorMittal failed to to keep its commitment in its capacity as the successful Resolution Applicant of Essar Steel which owed the Corporate Debtor Rs. 1,300 crore. ArcelorMittal instead paid only Rs. 501.1 crore towards the Corporate Debtor, it was claimed..The NCLT stated,.“If the Successful Resolution Applicant takes over, many corporate bodies under resolutions, each plan is separate, and implementation is separate cannot be linked and compared on the basis that Resolution Applicant is one and the same. When Resolution Applicant takes over, similar companies or companies of same group, certain advantages / disadvantages are bound to be. But there is no illegality on face of it.”.In view of the above, SREI’s objections were rejected and ArcelorMittal’s Resolution Plan was approved..Resolution Professional was represented by Advocates Deep Roy, Saswat K Acharya, Ashish Dey.ArcelorMittal was represented by Senior Advocate Pinaki Misra and Advocates Sudheer Sharma, Abhishek Swaroop, Ipsit Acharya.CoC was represented by Senior Advocates Ashok Parija and Advocates Soummo Biswas, Parth Gokhale.SREI was represented by Senior Advocate Ratnanko and Advocates Jishnu Chowdhury, S Mitra, Patita Paban Bishwal, Supriyo Gole..Read the Order: