ArcelorMittal vs Numetal: NCLT to pronounce judgement no later than Apr 12

Essar Steel
Having concluded hearing from all the parties in the Essar Steel insolvency case, the Ahmedabad bench of National Company Law Tribunal (NCLT) is likely to pronounce the order no later than April 12. On Friday, legal counsels of VTB-backed Numetal, ArcelorMittal, resolution professional (RP) and Essar Steel's Committee of Creditors (CoC) presented their concluding arguments.

 

Numetal and ArcelorMittal have not only defended their eligibility in the first round of bidding held on February 12 but applications have also been filed by the two bidders challenging each other's eligibility. Numetal has also prayed deferment of opening of second round of bids until the matter in the first is solved.

 

After concluding the hearing, the two adjudicating member bench at Ahmedabad comprising Harihar Prakash Chaturvedi and Manorama Kumari asked all the parties to submit their written submission and circulate the same amongst each other by Monday, April 9, 2018.

 

Represented by its legal counsel Mihir Thakore, Numetal reiterated its stand challenging its disqualification in the first round as well as asserting that ArcelorMittal has to pay its dues in another defaulter Uttam Galva before submitting bids for Essar Steel. ArcerlorMittal's counsel-led by Abhishek Manu Singhvi, on the other hand, continued to defend the same by stating that it was eligible for the bids by merely severing ties through the sale of shares in Uttam Galva.

 

Both the parties continued to differ in their interpretation of the newly amended Section 29A(c) and the proviso with it of the Insolvency and Bankruptcy Code (IBC). Section 29A(c) and its proviso state that 29A. A person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person—....(c) has an account, or an account of a corporate debtor under the management or control of such person or of whom such person is a promoter, classified as non-performing asset in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 and at least a period of one year has lapsed from the date of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor: Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to non-performing asset accounts before submission of resolution plan.

 

CoC's counsel, on the other hand, prayed to the tribunal that while Numetal, ArcelorMittal and RP can continue to challenge each other in NCLT, the second round of bids be allowed to be opened as the 290 days window of the insolvency process under IBC was ending on April 29.

 

Singhvi maintained that Numetal was "diverging and deflecting" the process by insisting on payment of dues by ArcelorMittal of Uttam Galva. "This is a classic divergence and deflection by Numetal at a time when the Ruias connected to it were the ones who made Essar Steel an NPA."

 

Earlier on Thursday, Numetal's counsel Mukul Rohatgi had alleged favouritism by CoC and RP towards ArcelorMittal. Quoting from the CoC's minutes of meeting, Rohatgi told the tribunal that though Cyril Amarchand Mangaldas (CAM) held the view that a positive control could only be foregone by paying of dues, the view of senior counsel Khambatta prevailed who believed that ArcelorMittal could "legitimately" sell its shareholding in Uttam Galva.

 

However, on Friday Singhvi questioned the manner in which Numetal was in possession of the confidential minutes of meeting of CoC. "The law requires that the minutes of meeting be kept confidential and shared only with a few people including the suspended directors of Essar Steel. How did Numetal get hold of such a confidential document?" Singhvi questioned.