The SC has held that an application under Section 34 of the Arbitration and Conciliation Act to cancel an award is covered by deferment under Section 14 of the Insolvency and Bankruptcy Code. Section 34 proceedings are proceedings relating to challenge for an arbitral award in a court against a corporate debtor and will be covered in the same manner as a decree emanating from a suit will cover appellate proceedings, a bench headed by Justice Nariman Commented in the decision of M / s Shah Brothers Ispat Ltd. versus P. Mohanraj and others.
The court addressed a plea in Power Grid Corporation of India Limited v. Jyoti Structures Limited (2018) 246 DLT 485, relying on the decision of the Delhi High Court, stating that the application under Section 34 for cancellation of award Will not be covered by section 14 of the IBC.
Section 14 (1) (a) empowers the decision-making authority to prohibit all of the following for declaration of deferment, namely- (a) Pending suit against the institution of the suit or corporate debtor for the execution of any decision. Or the continuance of proceedings which include the order of any court, decree, tribunal, arbitration panel, or other authority.