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SUPREME COURT: ARBITRATION PROCEEDINGS AFTER THE IMPOSITION OF MORATORIUM UNDER SECTION 14 OF INSOLVENCY AND BANKRUPTCY CODE IS NON EST IN LAW

In Alchemist Asset Reconstruction Company Limited v. M/s Hotel Gaudavan Private Limited, the Supreme Court bench comprising of Justices Rohinton Fali Nariman and Sanjay Kishan Kaul held that arbitration proceedings instituted after the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016  is non est in law.
In the instant case, NCLT had admitted a petition filed under the Code as a result of which moratorium was imposed under Section 14 of the Code. While the moratorium was in force, a letter was issued by Respondent No. 1 to Respondent No. 2 for invocation of arbitration clause between the parties. In another order, the NCLT stated that no arbitration proceedings could continue when a moratorium has been imposed.