{"id":14274,"date":"2024-04-18T00:00:09","date_gmt":"2024-04-18T00:00:09","guid":{"rendered":"https:\/\/jgu.edu.in\/mappingADR\/?p=14274"},"modified":"2024-04-17T17:52:39","modified_gmt":"2024-04-17T17:52:39","slug":"trafigura-india-private-limited-v-tdt-copper-limited","status":"publish","type":"post","link":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/","title":{"rendered":"Trafigura India Private Limited v. TDT Copper Limited"},"content":{"rendered":"\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-63afcc817eecf52d843469016b96eb51 wp-block-paragraph\" id=\"foo\"><strong>Judgment Name:<\/strong> <a href=\"https:\/\/nclat.nic.in\/display-board\/view_order\" rel=\"noreferrer noopener\" target=\"_blank\"><em>Trafigura India Private Limited v. TDT Copper Limited<\/em><\/a><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-5851b561aa1032d754e64343279b8235 wp-block-paragraph\" id=\"3n3cn\"><strong>Citation<\/strong>: MANU\/NL\/0738\/2022<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-ea18c4dc56e42ddc23d78d21e48f4abc wp-block-paragraph\" id=\"4vgb1\"><strong>Court<\/strong>: National Company Law Appellate Tribunal, New Delhi<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-072aa1678c6d802debf4b044b781b2f0 wp-block-paragraph\" id=\"7l0uc\"><strong>Coram<\/strong>: Anant Bijay Singh, J. Member (J) and Shreesha Merla, Member (T)<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-0dc05ad687bf772c25edeb8d07164714 wp-block-paragraph\" id=\"7ckhu\"><strong>Date<\/strong>: 15th September 2022.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-a7ad82f2ae55d70654eee59b7b6e2b64 wp-block-paragraph\" id=\"e0re1\"><strong>Keywords<\/strong>: IBC, Arbitration, NCLT, CIRP, Adjudicating Authority<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-44db200b5e712aced948a696627c9673 wp-block-paragraph\" id=\"1ru04\"><strong>Overview:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-1d90984f19afac2781b7a732493813ec wp-block-paragraph\" id=\"9vg8q\">The National Company Law Appellate Tribunal (\u201cNCLAT\u201d), upon hearing an order passed by the National Company Law Tribunal (\u201cNCLT\u201d), held that the jurisdiction of the Adjudicating Authority under <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=9#:~:text=Provided%20that%20Adjudicating%20Authority%2C%20shall,notice%20from%20the%20Adjudicating%20Authority.\" rel=\"noreferrer noopener\" target=\"_blank\">Section 9<\/a> of the Insolvency &amp; Bankruptcy Code, 2016 (\u201cIBC\u201d) is very limited and it does not extend to referring parties to the arbitration.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-136134bdf5f5d469efbfee0d66ca3231 wp-block-paragraph\" id=\"e75ir\"><strong>Facts:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-0a18b2fb5ff2cc900d16b075435e30e1 wp-block-paragraph\" id=\"aqi7h\">Trafigura India Private Limited (\u201cTrafigura\u201d) and TDT Copper Limited (\u201cTDT\u201d) entered into a Master Sale Agreement (\u201cMSA\u201d) dated 27th January 2016 as per which TDT agreed to buy a specified quantity of copper cathodes from Trafigura. The rights and obligations of the parties were governed by the terms of the MSA. As per the Agreement, Trafigura agreed to raise invoices on TDT in respect of the provisional price payable for the copper cathodes, and TDT agreed to make payment within 30 days of receiving such invoice. Trafigura supplied copper cathodes to TDT; however, TDT defaulted on invoices raised by Trafigura. Upon further negotiations, the parties entered into a Settlement Agreement on 20th November 2018 and arrived at a settlement for the amounts that were due and payable. However, when TDT defaulted on the terms of the settlement agreement, Trafigura initiated Corporate Insolvency Resolution Process (\u201cCIRP\u201d) against TDT under Section 9 of the IBC. During the proceedings, TDT made two arguments. Firstly, they did not owe an \u201coperational debt\u201d qua Section 9 hence the Adjudicating Authority must not initiate CIRP against TDT. Secondly, the appropriate relief would be to approach an arbitral tribunal in pursuance of the dispute resolution clause in the Settlement Agreement. The Adjudicating Authority accepted TDT\u2019s first submission; however, while highlighting the limited powers of the Adjudicating Authority under Section 9, It rejected TDT\u2019s plea to refer the matter to an arbitral tribunal. The NCLAT agreed with both the findings made by the Adjudicating Authority and reaffirmed the Adjudicating Authority\u2019s order in its entirety.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-76fe0d9942009f715f6034363655806d wp-block-paragraph\" id=\"boqhs\"><strong>Issue:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-edb57149bbf2b723d9e6cd44f267bff9 wp-block-paragraph\" id=\"ipsf\">Whether matters could be referred to arbitration by the Adjudicating Authority under Section 9 of the IBC?<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-09421ebeaea69b04e87d2bc5bcbfe652 wp-block-paragraph\" id=\"1t7h8\"><strong>Analysis<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-0734b6b6006575d9036251251a4e34d7 wp-block-paragraph\" id=\"8hkjf\">The NCLAT stated that the Adjudicating Authority has a very minimal role to play in IBC adjudication and that it has no power to refer parties to arbitration under Section 9 of the IBC. This ruling is in line with the well-established jurisprudence on the jurisdiction of the NCLT in hearing matters under Sections <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=7\" rel=\"noreferrer noopener\" target=\"_blank\">7<\/a>, <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=9#:~:text=Provided%20that%20Adjudicating%20Authority%2C%20shall,notice%20from%20the%20Adjudicating%20Authority.\" rel=\"noreferrer noopener\" target=\"_blank\">9<\/a> &amp; <a href=\"https:\/\/www.indiacode.nic.in\/show-data?actid=AC_CEN_2_11_00055_201631_1517807328273&amp;orderno=10\" rel=\"noreferrer noopener\" target=\"_blank\">10<\/a> of the IBC. The Supreme Court of India (\u201cSC\u201d), on this matter, has held that the role of the adjudicating authority when hearing applications under Section 9 is restricted to two tasks. Firstly, NCLT must ascertain the existence of a debt incurred by the corporate debtor. Secondly, if the result of the foregoing inquiry is made in the affirmative, then the Adjudicating Authority ought to admit the corporate debtor into CIRP; however, if the result of the foregoing inquiry is made in the negative, the application to admit the corporate debtor into CIRP is rejected. Moreover, in <a href=\"https:\/\/indiankanoon.org\/doc\/54725749\/\" rel=\"noreferrer noopener\" target=\"_blank\"><em>Arun Kumar Jagatramka Vs. Jindal Steel and Power Ltd. and Ors<\/em><\/a><em>.<\/em> the SC even frowned upon the practice of NCLTs engaging in judicial innovation to broaden their own powers under Sections 7, 9 &amp; 10. The Court held that such practices must be kept to the minimum and the adjudicating authority should focus on its sole role to ascertain the existence of a debt.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-f7599933f5a72f520f80c8cbdb4a50d7 wp-block-paragraph\" id=\"e9bmp\"><strong>Conclusion:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-aca6a0005684c8473f50fcf401c02295 wp-block-paragraph\" id=\"3hmpe\">While the ratio of this judgment is quite limited in its application, it clarifies the position of law on the powers of the adjudicating authority under the IBC One must not construe the order of the NCLAT as a bar on a party\u2019s rights to recover money vide arbitration and being forced to admit such a debtor into CIRP. The ruling merely pertains to the NCLT\u2019s powers under Section 9 of the IBC and does not address the arbitrability of monetary reliefs in case of a breach of a contract. The NCLAT, in its judgment, even stated that the corporate debtor is free to approach the court of competent jurisdiction to hear the plea of referring parties to the arbitration.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color has-medium-font-size wp-elements-a179aec8908dd4f62ec7d1deb8471693 wp-block-paragraph\" id=\"jfq1\">[<em>This case note has been authored by Ryan Joseph, an Editor at Mapping ADR<\/em>.]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Judgment Name: Trafigura India Private Limited v. TDT Copper Limited Citation: MANU\/NL\/0738\/2022 Court: National Company Law Appellate Tribunal, New Delhi Coram: Anant Bijay Singh, J. Member (J) and Shreesha Merla, Member (T) Date: 15th September 2022. Keywords: IBC, Arbitration, NCLT, CIRP, Adjudicating Authority Overview: The National Company Law Appellate Tribunal (\u201cNCLAT\u201d), upon hearing an order passed by the National Company Law Tribunal (\u201cNCLT\u201d), held that the jurisdiction of the Adjudicating Authority under Section 9 of the Insolvency &amp; Bankruptcy Code, 2016 (\u201cIBC\u201d) is very limited and it does not extend to referring parties to the arbitration. Facts: Trafigura India Private Limited (\u201cTrafigura\u201d) and TDT Copper Limited (\u201cTDT\u201d) entered into a Master Sale Agreement (\u201cMSA\u201d) dated 27th January 2016 as per which TDT agreed to buy a specified quantity of copper cathodes from Trafigura. The rights and obligations of the parties were governed by the terms of the MSA. As per the Agreement, Trafigura agreed to raise invoices on TDT in respect of the provisional price payable for the copper cathodes, and TDT agreed to make payment within 30 days of receiving such invoice. Trafigura supplied copper cathodes to TDT; however, TDT defaulted on invoices raised by Trafigura. Upon further negotiations, the parties entered into a Settlement Agreement on 20th November 2018 and arrived at a settlement for the amounts that were due and payable. However, when TDT defaulted on the terms of the settlement agreement, Trafigura initiated Corporate Insolvency Resolution Process (\u201cCIRP\u201d) against TDT under Section 9 of the IBC. During the proceedings, TDT made two arguments. Firstly, they did not owe an \u201coperational debt\u201d qua Section 9 hence the Adjudicating Authority must not initiate CIRP against TDT. Secondly, the appropriate relief would be to approach an arbitral tribunal in pursuance of the dispute resolution clause in the Settlement Agreement. The Adjudicating Authority accepted TDT\u2019s first submission; however, while highlighting the limited powers of the Adjudicating Authority under Section 9, It rejected TDT\u2019s plea to refer the matter to an arbitral tribunal. The NCLAT agreed with both the findings made by the Adjudicating Authority and reaffirmed the Adjudicating Authority\u2019s order in its entirety. Issue: Whether matters could be referred to arbitration by the Adjudicating Authority under Section 9 of the IBC? Analysis The NCLAT stated that the Adjudicating Authority has a very minimal role to play in IBC adjudication and that it has no power to refer parties to arbitration under Section 9 of the IBC. This ruling is in line with the well-established jurisprudence on the jurisdiction of the NCLT in hearing matters under Sections 7, 9 &amp; 10 of the IBC. The Supreme Court of India (\u201cSC\u201d), on this matter, has held that the role of the adjudicating authority when hearing applications under Section 9 is restricted to two tasks. Firstly, NCLT must ascertain the existence of a debt incurred by the corporate debtor. Secondly, if the result of the foregoing inquiry is made in the affirmative, then the Adjudicating Authority ought to admit the corporate debtor into CIRP; however, if the result of the foregoing inquiry is made in the negative, the application to admit the corporate debtor into CIRP is rejected. Moreover, in Arun Kumar Jagatramka Vs. Jindal Steel and Power Ltd. and Ors. the SC even frowned upon the practice of NCLTs engaging in judicial innovation to broaden their own powers under Sections 7, 9 &amp; 10. The Court held that such practices must be kept to the minimum and the adjudicating authority should focus on its sole role to ascertain the existence of a debt. Conclusion: While the ratio of this judgment is quite limited in its application, it clarifies the position of law on the powers of the adjudicating authority under the IBC One must not construe the order of the NCLAT as a bar on a party\u2019s rights to recover money vide arbitration and being forced to admit such a debtor into CIRP. The ruling merely pertains to the NCLT\u2019s powers under Section 9 of the IBC and does not address the arbitrability of monetary reliefs in case of a breach of a contract. The NCLAT, in its judgment, even stated that the corporate debtor is free to approach the court of competent jurisdiction to hear the plea of referring parties to the arbitration. [This case note has been authored by Ryan Joseph, an Editor at Mapping ADR.]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,138],"tags":[],"class_list":["post-14274","post","type-post","status-publish","format-standard","hentry","category-all","category-case-updates","post-no-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR\" \/>\n<meta property=\"og:description\" content=\"Judgment Name: Trafigura India Private Limited v. TDT Copper Limited Citation: MANU\/NL\/0738\/2022 Court: National Company Law Appellate Tribunal, New Delhi Coram: Anant Bijay Singh, J. Member (J) and Shreesha Merla, Member (T) Date: 15th September 2022. Keywords: IBC, Arbitration, NCLT, CIRP, Adjudicating Authority Overview: The National Company Law Appellate Tribunal (\u201cNCLAT\u201d), upon hearing an order passed by the National Company Law Tribunal (\u201cNCLT\u201d), held that the jurisdiction of the Adjudicating Authority under Section 9 of the Insolvency &amp; Bankruptcy Code, 2016 (\u201cIBC\u201d) is very limited and it does not extend to referring parties to the arbitration. Facts: Trafigura India Private Limited (\u201cTrafigura\u201d) and TDT Copper Limited (\u201cTDT\u201d) entered into a Master Sale Agreement (\u201cMSA\u201d) dated 27th January 2016 as per which TDT agreed to buy a specified quantity of copper cathodes from Trafigura. The rights and obligations of the parties were governed by the terms of the MSA. As per the Agreement, Trafigura agreed to raise invoices on TDT in respect of the provisional price payable for the copper cathodes, and TDT agreed to make payment within 30 days of receiving such invoice. Trafigura supplied copper cathodes to TDT; however, TDT defaulted on invoices raised by Trafigura. Upon further negotiations, the parties entered into a Settlement Agreement on 20th November 2018 and arrived at a settlement for the amounts that were due and payable. However, when TDT defaulted on the terms of the settlement agreement, Trafigura initiated Corporate Insolvency Resolution Process (\u201cCIRP\u201d) against TDT under Section 9 of the IBC. During the proceedings, TDT made two arguments. Firstly, they did not owe an \u201coperational debt\u201d qua Section 9 hence the Adjudicating Authority must not initiate CIRP against TDT. Secondly, the appropriate relief would be to approach an arbitral tribunal in pursuance of the dispute resolution clause in the Settlement Agreement. The Adjudicating Authority accepted TDT\u2019s first submission; however, while highlighting the limited powers of the Adjudicating Authority under Section 9, It rejected TDT\u2019s plea to refer the matter to an arbitral tribunal. The NCLAT agreed with both the findings made by the Adjudicating Authority and reaffirmed the Adjudicating Authority\u2019s order in its entirety. Issue: Whether matters could be referred to arbitration by the Adjudicating Authority under Section 9 of the IBC? Analysis The NCLAT stated that the Adjudicating Authority has a very minimal role to play in IBC adjudication and that it has no power to refer parties to arbitration under Section 9 of the IBC. This ruling is in line with the well-established jurisprudence on the jurisdiction of the NCLT in hearing matters under Sections 7, 9 &amp; 10 of the IBC. The Supreme Court of India (\u201cSC\u201d), on this matter, has held that the role of the adjudicating authority when hearing applications under Section 9 is restricted to two tasks. Firstly, NCLT must ascertain the existence of a debt incurred by the corporate debtor. Secondly, if the result of the foregoing inquiry is made in the affirmative, then the Adjudicating Authority ought to admit the corporate debtor into CIRP; however, if the result of the foregoing inquiry is made in the negative, the application to admit the corporate debtor into CIRP is rejected. Moreover, in Arun Kumar Jagatramka Vs. Jindal Steel and Power Ltd. and Ors. the SC even frowned upon the practice of NCLTs engaging in judicial innovation to broaden their own powers under Sections 7, 9 &amp; 10. The Court held that such practices must be kept to the minimum and the adjudicating authority should focus on its sole role to ascertain the existence of a debt. Conclusion: While the ratio of this judgment is quite limited in its application, it clarifies the position of law on the powers of the adjudicating authority under the IBC One must not construe the order of the NCLAT as a bar on a party\u2019s rights to recover money vide arbitration and being forced to admit such a debtor into CIRP. The ruling merely pertains to the NCLT\u2019s powers under Section 9 of the IBC and does not address the arbitrability of monetary reliefs in case of a breach of a contract. The NCLAT, in its judgment, even stated that the corporate debtor is free to approach the court of competent jurisdiction to hear the plea of referring parties to the arbitration. [This case note has been authored by Ryan Joseph, an Editor at Mapping ADR.]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/\" \/>\n<meta property=\"og:site_name\" content=\"Mapping ADR\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-18T00:00:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-17T17:52:39+00:00\" \/>\n<meta name=\"author\" content=\"vrpeesari\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"vrpeesari\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/\",\"url\":\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/\",\"name\":\"Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR\",\"isPartOf\":{\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/#website\"},\"datePublished\":\"2024-04-18T00:00:09+00:00\",\"dateModified\":\"2024-04-17T17:52:39+00:00\",\"author\":{\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/#\/schema\/person\/7ad62b84eaa4362172303f3cad2b48b5\"},\"breadcrumb\":{\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/jgu.edu.in\/mappingADR\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Trafigura India Private Limited v. TDT Copper Limited\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/#website\",\"url\":\"https:\/\/jgu.edu.in\/mappingADR\/\",\"name\":\"O.P. Jindal Global University\",\"description\":\"\",\"alternateName\":\"India's Best Private University\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/jgu.edu.in\/mappingADR\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/jgu.edu.in\/mappingADR\/#\/schema\/person\/7ad62b84eaa4362172303f3cad2b48b5\",\"name\":\"vrpeesari\",\"url\":\"https:\/\/jgu.edu.in\/mappingADR\/author\/vrpeesari\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/","og_locale":"en_US","og_type":"article","og_title":"Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR","og_description":"Judgment Name: Trafigura India Private Limited v. TDT Copper Limited Citation: MANU\/NL\/0738\/2022 Court: National Company Law Appellate Tribunal, New Delhi Coram: Anant Bijay Singh, J. Member (J) and Shreesha Merla, Member (T) Date: 15th September 2022. Keywords: IBC, Arbitration, NCLT, CIRP, Adjudicating Authority Overview: The National Company Law Appellate Tribunal (\u201cNCLAT\u201d), upon hearing an order passed by the National Company Law Tribunal (\u201cNCLT\u201d), held that the jurisdiction of the Adjudicating Authority under Section 9 of the Insolvency &amp; Bankruptcy Code, 2016 (\u201cIBC\u201d) is very limited and it does not extend to referring parties to the arbitration. Facts: Trafigura India Private Limited (\u201cTrafigura\u201d) and TDT Copper Limited (\u201cTDT\u201d) entered into a Master Sale Agreement (\u201cMSA\u201d) dated 27th January 2016 as per which TDT agreed to buy a specified quantity of copper cathodes from Trafigura. The rights and obligations of the parties were governed by the terms of the MSA. As per the Agreement, Trafigura agreed to raise invoices on TDT in respect of the provisional price payable for the copper cathodes, and TDT agreed to make payment within 30 days of receiving such invoice. Trafigura supplied copper cathodes to TDT; however, TDT defaulted on invoices raised by Trafigura. Upon further negotiations, the parties entered into a Settlement Agreement on 20th November 2018 and arrived at a settlement for the amounts that were due and payable. However, when TDT defaulted on the terms of the settlement agreement, Trafigura initiated Corporate Insolvency Resolution Process (\u201cCIRP\u201d) against TDT under Section 9 of the IBC. During the proceedings, TDT made two arguments. Firstly, they did not owe an \u201coperational debt\u201d qua Section 9 hence the Adjudicating Authority must not initiate CIRP against TDT. Secondly, the appropriate relief would be to approach an arbitral tribunal in pursuance of the dispute resolution clause in the Settlement Agreement. The Adjudicating Authority accepted TDT\u2019s first submission; however, while highlighting the limited powers of the Adjudicating Authority under Section 9, It rejected TDT\u2019s plea to refer the matter to an arbitral tribunal. The NCLAT agreed with both the findings made by the Adjudicating Authority and reaffirmed the Adjudicating Authority\u2019s order in its entirety. Issue: Whether matters could be referred to arbitration by the Adjudicating Authority under Section 9 of the IBC? Analysis The NCLAT stated that the Adjudicating Authority has a very minimal role to play in IBC adjudication and that it has no power to refer parties to arbitration under Section 9 of the IBC. This ruling is in line with the well-established jurisprudence on the jurisdiction of the NCLT in hearing matters under Sections 7, 9 &amp; 10 of the IBC. The Supreme Court of India (\u201cSC\u201d), on this matter, has held that the role of the adjudicating authority when hearing applications under Section 9 is restricted to two tasks. Firstly, NCLT must ascertain the existence of a debt incurred by the corporate debtor. Secondly, if the result of the foregoing inquiry is made in the affirmative, then the Adjudicating Authority ought to admit the corporate debtor into CIRP; however, if the result of the foregoing inquiry is made in the negative, the application to admit the corporate debtor into CIRP is rejected. Moreover, in Arun Kumar Jagatramka Vs. Jindal Steel and Power Ltd. and Ors. the SC even frowned upon the practice of NCLTs engaging in judicial innovation to broaden their own powers under Sections 7, 9 &amp; 10. The Court held that such practices must be kept to the minimum and the adjudicating authority should focus on its sole role to ascertain the existence of a debt. Conclusion: While the ratio of this judgment is quite limited in its application, it clarifies the position of law on the powers of the adjudicating authority under the IBC One must not construe the order of the NCLAT as a bar on a party\u2019s rights to recover money vide arbitration and being forced to admit such a debtor into CIRP. The ruling merely pertains to the NCLT\u2019s powers under Section 9 of the IBC and does not address the arbitrability of monetary reliefs in case of a breach of a contract. The NCLAT, in its judgment, even stated that the corporate debtor is free to approach the court of competent jurisdiction to hear the plea of referring parties to the arbitration. [This case note has been authored by Ryan Joseph, an Editor at Mapping ADR.]","og_url":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/","og_site_name":"Mapping ADR","article_published_time":"2024-04-18T00:00:09+00:00","article_modified_time":"2024-04-17T17:52:39+00:00","author":"vrpeesari","twitter_card":"summary_large_image","twitter_misc":{"Written by":"vrpeesari","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/","url":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/","name":"Trafigura India Private Limited v. TDT Copper Limited | Mapping ADR","isPartOf":{"@id":"https:\/\/jgu.edu.in\/mappingADR\/#website"},"datePublished":"2024-04-18T00:00:09+00:00","dateModified":"2024-04-17T17:52:39+00:00","author":{"@id":"https:\/\/jgu.edu.in\/mappingADR\/#\/schema\/person\/7ad62b84eaa4362172303f3cad2b48b5"},"breadcrumb":{"@id":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/jgu.edu.in\/mappingADR\/trafigura-india-private-limited-v-tdt-copper-limited\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/jgu.edu.in\/mappingADR\/"},{"@type":"ListItem","position":2,"name":"Trafigura India Private Limited v. TDT Copper Limited"}]},{"@type":"WebSite","@id":"https:\/\/jgu.edu.in\/mappingADR\/#website","url":"https:\/\/jgu.edu.in\/mappingADR\/","name":"O.P. Jindal Global University","description":"","alternateName":"India's Best Private University","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/jgu.edu.in\/mappingADR\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/jgu.edu.in\/mappingADR\/#\/schema\/person\/7ad62b84eaa4362172303f3cad2b48b5","name":"vrpeesari","url":"https:\/\/jgu.edu.in\/mappingADR\/author\/vrpeesari\/"}]}},"_links":{"self":[{"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/posts\/14274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/comments?post=14274"}],"version-history":[{"count":1,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/posts\/14274\/revisions"}],"predecessor-version":[{"id":14275,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/posts\/14274\/revisions\/14275"}],"wp:attachment":[{"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/media?parent=14274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/categories?post=14274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jgu.edu.in\/mappingADR\/wp-json\/wp\/v2\/tags?post=14274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}