The Supreme Court affirmed that a final resolution plan under IBC cannot be modified by arbitral proceedings initiated post-approval.
Arbitration Claim Cannot Alter Approved IBC Resolution Plan: Supreme Court
The Supreme Court held that once a resolution plan is approved under Section 31 of the IBC, it binds all stakeholders and cannot be altered or undermined by subsequent arbitration claims. The Court dismissed a plea seeking enforcement of an arbitral award that contradicted the approved plan.
The dispute arose when a financial creditor initiated arbitration after the resolution plan was approved, seeking additional amounts beyond what was stipulated. The Court emphasized that the IBC framework prioritizes finality and certainty in resolution processes. All claims must be submitted during the CIRP period under Section 10, and post-approval claims that seek to modify the plan are impermissible.
"The resolution plan, once approved, attains finality and supersedes all prior contracts and claims."
This ruling clarifies that arbitration proceedings, even if pending, do not override the IBC's priority of a confirmed resolution plan. Legal teams must ensure claims are submitted before plan approval; otherwise, they risk being time-barred or excluded entirely.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 31
