The Supreme Court of India in Electrosteel Steel Limited vs
Ispat Carrier Private Limited (Civil Appeal No. 2896 of 2024
arising out of SLP (C) No. 15823 of 2023), reinforced a pivotal
principle governing India's insolvency framework. The case,
cantered on whether claims of operational creditors, like Ispat
Carrier's, which were explicitly settled at nil under a
resolution plan approved by the National Company Law Tribunal
(NCLT) on 17 April 2018, could still be pursued through
arbitration. Despite the resolution plan's approval, the
Facilitation Council proceeded to pass an award on 6 July 2018,
mandating Electrosteel Steel Limited to pay a substantial sum to
Ispat Carrier.
This decision has unequivocally clarified that once a resolution
plan is sanctioned under the Insolvency and Bankruptcy Code, 2016
(IBC), all claims not incorporated within it are legally
extinguished, marking a significant triumph for the finality and
binding nature of resolution plans and
