Maintainability Of Application Under Section 8 Of Arbitration & Conciliation Act, 1996 In An Insolvency Proceeding

INTRODUCTION:

The Supreme Court in a recent judgment of Indus Biotech Pvt. Ltd. vs. Kotak India Venture (Offshore) Fund  [AIR 2021 SC 1638] has settled an important question of law: 'whether an application filed under Section 8 of Arbitration & Conciliation Act, 1996 ('A&C Act') can be said to be maintainable in a proceeding initiated under Insolvency and Bankruptcy Code, 2016 ('IBC')'.

The Supreme Court of India was seized of two connected matters. The first matter was filed by the Petitioner, Indus Biotech Pvt. Ltd. ('Indus'), under Section 11 of A&C Act seeking appointment of nominee arbitrator of Respondent Nos. 1 to 4, who were 4 different Kotak Group Companies ('Kotak Group'). While one of the entities was a Mauritius based company, the other entities, though Indian entities, were its sister ventures. The second matter was an appeal arising out of the judgment dated 09.06.2020 passed by NCLT, Mumbai. NCLT Mumbai had allowed an application filed by Indus