Clasis Law won in the Supreme Court for Australian lender Macquarie Bank whose money recovery suit against global steel giant ArcelorMittal’s loss-making unit Uttam Galva Steel, was dismissed in June by the National Company Law Tribunal as then reported by VC Circle.

Senior advocates Mukul Rohatgi and Arvind Datar, were briefed by advocate Rahul Chitnis and by Clasis Law partner Mustafa Motiwala, associate partner Shwetabh Sinha, senior associate Ashmi Mohan and associate Pragya Nalwa for Macquarie Bank.

Senior advocates Abhishek Manu Singhvi and Shyam Divan were briefed by advocate Abhinav Vasishth for Uttam Galva Steel.

Justices RF Nariman and Navin Sinha overturned the NCLAT’s order against Macquarie and settled the position that filing of the Certificate under Section 9(3)(c) of the Insolvency and Bankruptcy Code, 2016 is a procedural requirement, which is directory in nature. The Supreme Court has further held that the Demand Notices issued by the Advocates under Section 8 of the Code are valid and in order.

The NCLAT had dismissed Macquarie’s appeal from the NCLT order reasoning that the appellant not being a ‘Financial Institution’ within the meaning of Section 3 (14) of the Code, any certificate given by Macquarie cannot be relied upon, to decide the default of debt of Uttam Galva and that the lawyers not holding any position with or in relation to the operational creditor, cannot issue notice under Section 8 of the Code. The Supreme Court overruled the NCLAT’s position and held that a copy of the certificate from the financial institution maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor is certainly not a condition precedent to trigger the insolvency process under the Code.

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