In a major breakthrough for
India's insolvency mechanism which is still in its evolving stage, Jet
Airways would be the first Indian company to undergo insolvency
proceedings under the Cross Border Insolvency Protocol along with the
Insolvency and Bankruptcy Code (IBC) of India.
Company Law Appellate Tribunal (NCLAT) had allowed the Dutch court
administrator of Jet Airways to attend the meetings of the bankrupt
airline's Committee of Creditors (CoC). The resolution professional and
the Dutch administrator, however, filed an application seeking an
amendment in the September 26 order providing approval to the Dutch
administrator, which the appellate tribunal accepted on Thursday.
NCLAT's September 26 order had said: "Joint 'Corporate Insolvency
Resolution Process' will continue in accordance with 'Insolvency and
Bankruptcy Code, 2016'."
The appeal wanted the order to clarify
that the resolution process would be carried on in accordance with
'Insolvency and Bankruptcy Code, 2016' and the 'Cross Border Insolvency
Protocol', seeking the inclusion of 'Cross Border Insolvency Protocol'
in the paragraph, along with 'Insolvency and Bankruptcy Code, 2016',
which the bench accepted.
"We make it clear that the Dutch
Trustee (Administrator) will work in cooperation with the 'Resolution
Professional of India' and, if any, suggestion is required to be given,
he may give it to the 'Resolution Professional'. The draft of 'Cross
Border Insolvency Protocol' clause is made final as above," the order
"It should be treated as a direction of this
appellate tribunal and it would be mandatory to comply with the order of
this Appellate Tribunal subject to the other procedures which are to be
followed in terms of the 'Insolvency and Bankruptcy Code, 2016'."
debt-ridden Jet Airways is facing insolvency proceedings in The
Netherlands too. It was declared bankrupt there after it had failed to
pay two European creditors. The Dutch court subsequently appointed a
The Mumbai bench of the National
Company Law Tribunal (NCLT) had rejected the Dutch administrator's plea
to recognise their proceedings, following which the administrator
approached the NCLAT.
The grounded Jet Airways owes over Rs
8,000 crore to its lenders. Besides the lenders, the airline is
estimated to have a total liability of about Rs 25,000 crore which
includes dues of operational creditors.
Jet Airways, on April
17, announced the temporary suspension of all flight services as it
failed to secure interim funding to maintain even the bare minimum