Companies

NCLT rejects Karur Vysya Bank’s pleas on ArcelorMittal’s Essar bid

Our Bureau Ahmedabad | Updated on March 07, 2019 Published on March 07, 2019

Karur Vysya Bank wanted the NCLT to reject ArcelorMittal’s resolution plan for Essar Steel citing pending dues from the company in KSS Petron.

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on Thursday rejected two pleas by lender Karur Vysya Bank (KVB) which sought to reject ArcelorMittal's resolution plan for Essar Steel India Limited (ESIL) citing pending dues from ArcelorMittal in KSS Petron.

KVB, which was asked last month to make written submissions on its plea before the NCLT Ahmedabad, had claimed dues worth over ₹3 crore accruing out of KSS Petron where ArcelorMittal was a related party. In its plea, the lender had sought the quashing of ArcelorMittal’s takeover bid of ₹42,000 crore for ESIL on the grounds of non-payment of dues accruing to itself.

The two-member Ahmedabad bench of NCLT comprising Harihar Prakash Chaturvedi and Manorama Kumari said, “(KVB) did not fall under the category of a financial creditor of the Corporate Debtor ESIL. KVB did not file its plea within the deadline set by a Supreme Court (SC) order of October 4, 2018.”

Earlier in February, 2019, during the hearing in the matter, the respondents i.e., Committee of Creditors (CoC) and Resolution Professional (RP) of ESIL objected to KVB’s pleas stating that the bank was late in submitting its claims with KSS Petron’s RP.

The SC had set a deadline of October 18 for the interested bidders for ESIL to settle all their related party dues to be eligible for bidding. The COC had claimed that KVB had applied for its claims with KSS Petron’s RP on October 19.

The Ahmedabad bench of NCLT also maintained that the tribunal was bound by the deadline set by the Supreme Court and also found KVB ineligible to claim a copy of the resolution plan submitted by the ArcelorMittal for Essar Steel, as it did not fall under the financial creditor category of the distressed steel player.

Earlier in the day, the Ahmedabad bench also rejected a plea by another operational creditor (OC), Duferco SA, which had claimed damages from ESIL arising out of a breach of contract. The bench stated that the “remedy lies elsewhere” and not with the NCLT.

Published on March 07, 2019
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