JSW Ispat Special Products Limited v. Bharat Petroresources Limited
Court – Delhi High Court
Citation – O.M.P. (COMM) 533/2024
Date – 11.09.2025
The Hon’ble Delhi High Court has held that the claims that are not a part of the Resolution Plan are not arbitrable once the insolvency proceedings have been initiated and such claims shall extinguish.
The Court held,
“39. It is thus clear from a conspectus of the aforementioned judgments that all such claims, which are not a part of the Resolution Plan on the date of approval, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of claims, which are not part of the Resolution Plan and so much so this would apply to the statutory dues owed to Central/State Governments, local bodies etc. In the instant case, the claims which were referred to arbitration were not part of the approved Resolution Plan and stood extinguished and were thus not arbitrable.
40. In Electrosteel (supra), the Supreme Court was examining the validity of the arbitral award in respect of claims of the Creditor, which were outside the approved Resolution Plan. After a detailed and extensive discussion on the provisions of IBC and referring to all the earlier judgements of the Supreme Court on this aspect, it was held that the Facilitation Council under the MSME Act, did not have the jurisdiction to arbitrate on the claims which stood extinguished on approval of the Resolution Plan and therefore, the arbitral award was without jurisdiction. Pertinently, in this case it was mentioned in the Resolution Plan that any and all claims or demands, admitted or not, due or contingent, asserted or unasserted, known or unknown, present or future etc., would be written off in full and deemed to be permanently extinguished by virtue of order of NCLT approving the Resolution Plan with a special emphasis that the Consortium or Company, will not be held responsible or liable, at any point of time, directly or indirectly.”
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