ESAHL argues the SC October order does not bar the NCLT or the Essar Steel lenders from considering the settlement offer proposed by it ‘for and on behalf of Essar Steel’.
Essar Steel Asia Holdings (ESAHL) argued on Monday that the Supreme Court’s October order does not bar the National Company Law Tribunal or the Essar Steel lenders from considering the settlement offer proposed by it ‘for and on behalf of Essar Steel’.
The Ahmedabad bench of the NCLT will continue to hear arguments on Tuesday.
Responding to earlier arguments made by the committee of creditors (CoC) that the SC’s order only allowed for submission of plans by Arcelor and Numetal and that the one by the Ruias was beyond the SC’s judgment, counsel for ESAHL, Mihir Joshi, said, “…the Supreme Court Order has only decided on the eligibility of the bidders before it.”
The SC order had stated that both ArcelorMittal and Numetal, who were in race to acquire Essar Steel, would have to clear any dues within two weeks to become eligible to bid for the company.
Joshi argued that the SC’s directions under Article 142 can only be read in the context of issues and parties before the SC and cannot adversely affect the rights of third parties which were not before the Supreme Court, such as ESAHL.He said it was ‘highly unusual’ for CoC to not even consider a proposal, which is higher than the best resolution plan by `12,000 crore and ensures full repayment to all the creditors.
Over 90% of the CoC had voted in favour of the bid by Arcelor Mittal which promised Rs 39,500 crore by way of cash upfront, and currently awaits approval from the NCLT for execution.
A day after it, Essar Steel promoters offered to pay Rs 54,389 crore towards a full settlement of the entire admitted claims of the financial creditors, operational creditors, and workmen and employees of Essar Steel.