Govt-owned CONCOR to face insolvency resolution process
Public sector container and transportation company — Container Corporation of India Limited (CONCOR) – will have to face Corporate Insolvency Resolution Process after the New Delhi bench of the National Company Law Tribunal (NCLT) admitted an insolvency application against the company on 12 July 2023.
The insolvency application against CONCOR was filed by Mumbai-based logistics company Roadwings International Pvt Ltd after the former defaulted on a payment of Rs 87.5 crore.
The NCLT has appointed Vivek Sharma (Registration Number: IBBI/IPA002/IP-N01077/2020-2021/13442 and e-mail id: fcsviveksharma@gmail.com) as an Interim Resolution Professional for the corporate debtor (CONCOR).
CONCOR in an exchange filing said that NCLT admitted the insolvency plea was filed for seeking the amount awarded by an Arbitral Tribunal despite the fact that the said Arbitral award was pending challenge from the company before the High Court of Delhi at New Delhi.
Further, it may be noted that an appeal against the above said order, has already been filed before National Company Law Appellate Tribunal (NCLAT), New Delhi by CONCOR.
Brief of the case
A commercial dispute between CONCOR and the operational creditor Roadwings International started after the latter was declared the successful bidder by CONCOR for a tender for manufacture, supply and commissioning along with operations and maintenance of Reach Stacker Machines.
Roadwings International submitted in NCLT that it had supplied and commissioned the reach stackers of the desired technical specifications as mentioned in Section IV of the contract. However, during the continuance of the contract, certain issues and differences arose between the parties and to resolve the dispute amicably, the parties went for Direct Informal Negotiations. Roadwings adds that since some of the issues could not be resolved amicably through Direct Informal Negotiations, it had initiated Arbitration Proceedings against the CONCOR.
The operational creditor further submits that the Arbitral Tribunal after hearing both the parties at length had concluded the proceedings and passed the final Award dated 1 June 2022 for an awarded amount of Rs. 81.36 crore at a simple interest rate of 10% per annum along with the applicable tax.
Roadwings issued a demand notice on 15 July 2022 to the Corporate Debtor and claimed the awarded amount of Rs 87.50 crore. However, the corporate debtor failed to make any payment or reply to the demand notice issued within the prescribed timeline of 10 days of receiving the notice.
It adds that on 22 July 2022, the corporate debtor had sent a reply to it raising that they are disputing the award and approaching the higher judicial forum for setting aside the Arbitral Award.
CONCOR had challenged the insolvency petition in NCLT saying that the demand notice was served prematurely and and even prior to receiving the complete award.
However, the NCLT did not find merit in CONCOR’s submission, and it allowed the admission of the insolvency application.
About CONCOR
CONCOR is a Navratna PSU company with the Central government holding 54.8% stake in the company. The government is looking to sell 30.8% of its stake in CONCOR for Rs 12,000 crore.
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