The Mumbai bench of the National Company Law Tribunal (NCLT) has stayed proceedings by an arbitration tribunal that was approached by Moorgate Industries for action against Monnet Ispat and Energy. Sumit Binani, the resolution professional of Monnet Ispat had sought the intervention of the bankruptcy court in the matter. In the case between Moorgate Industries and Monnet Ispat, an arbitration tribunal had said in its order on October 11 that it was not bound by the moratorium granted to Monnet Ispat under the Insolvency and Bankruptcy Code (IBC).
The NCLT had admitted SBI’s insolvency petition against Monnet Ispat on July 18 and granted a six-month moratorium prohibiting legal suits against the company. Monnet Ispat is among the 12 companies named by the Reserve Bank of India (RBI) in its first list of large loan defaulters to be referred to the NCLT. “This code has overriding effect through section 238 of the code over all other laws dealing with claims against corporate debtor/corporate person, which are inconsistent therewith contained in any other laws in force or any instrument having effect by virtue of any such law,” the NCLT bench said. The NCLT said that that arbitration proceeding of Moorgate Industries of India vs Monnet Ispat & Energy pending before the arbitral authority “will remain suspended until the moratorium period is completed”.
Monnet Ispat has an Integrated Steel Plant (ISP) of 1.5 MMTPA along with associated facilities including 0.80 MMTPA sponge iron, two MMTPA pellet plants, 0.95 MMTPA Sinter plant and 230 MW captive power plant in the state of Chhattisgarh along with 7.5 MMTPA coal beneficiation facilities in Chhattisgarh and Odisha. In November, 2015, lenders of Monnet Ispat had decided to convert Rs 368 crore of debt into equity at Rs 34.2 per share under the Reserve Bank of India’s (RBI) strategic debt restructuring scheme. In FY17, the New Delhi-based firm had posted a net loss of Rs 1,734 crore on the back of Rs 1,375 crore in revenues.