IMPORTANT POINT
The approval of a Resolution Plan under the IBC extinguishes all claims not included in it, making such claims non-justiciable in arbitration.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The present challenge under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, “the 1996 Act”) has been preferred against an interim award under Section 31(6) of the 1996 Act dated April 3, 2024, by which the learned Arbitrator dismissed the counter claim filed by the respondent/present petitioner and directed the pleadings filed in connection thereto to be expunged from the records of the arbitral proceeding.

2. The brief facts of the case are as follows:

3. The petitioner is a public sector undertaking. It floated an e-tender in the month of February, 2017 for the job of design and engineering, manufacture/procurement, testing, supply, installation and commissioning of grid connected rooftop solar PV power plant in the township of the petitioner, West Bengal Power Development Corporation Limited (WBPDCL), including five years comprehensive maintenance on turnkey basis at various locations in West Bengal.

4. The claimant/respondent participated in the tender and came out successful. A Letter of Award (LoA) was issued on May 12, 2017, to which there were two subsequent amendments, both dated June 27, 2018. The original work was to be completed by February 7, 2018 but was ultimately completed on February 15, 2019. The claimant/ present respondent subsequently invoked the arbitration clause in the agreement between the parties and made several claims, including outstanding dues, interest, loss and damages for illegal termination, damages for reputation and goodwill and other ancillary reliefs. The Statement of Claim was filed on January 17, 2023.

5. The present petitioner filed a Statement of Defence as well as a counter claim on May 13, 2023, making claims under several heads.

6. Prior to the commencement of the arbitral proceeding, the claimant/respondent herein entered into a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) on September 17, 2020. On October 13, 2023, a Resolution Plan was approved by the National Company Law Tribunal (NCLT), Kolkata, thereby culminating the CIRP.

7. Prior to the approval of the Resolution Plan, the claimant/respondent had taken out an application under Section 16 of the 1996 Act, contending that the learned Arbitrator did not have jurisdiction to take up the counter claim in view of the moratorium under Section 14 of the IBC due to the pending CIRP. However, the learned Arbitrator turned down such objection and proceeded with the counter claim as well as the Statement of Claim.

8. After the approval of the Resolution Plan on October 13, 2023, the claimant/respondent took out an application under Section 31(6) of the 1996 Act, seeking dismissal of the counter claim on the ground that all claims against the Corporate Debtor /claimant-Company had been extinguished by virtue of such approval. By the impugned interim award, the learned Arbitrator allowed the said application and dismissed the counter claim, expunging the connected pleadings as well. Being aggrieved thereby, the present application under Section 34 of the 1996 Act has been preferred.

9. Learned counsel for the petitioner argues that in view of the earlier dismissal of the claimant’s application under Section 16 on the self-same ground, the impugned interim award is barred by the principle of res judicata. It is contended that the learned Arbitrator, while dismissing the challenge to jurisdiction, had dealt with the issues involved herein at length, which gave a conclusive terminus to such issues.

10. Learned counsel next contends that the counter claim was not limited to pre-CIRP claims but also extended to future losses and continuing claims which would arise till after the initiation of the CIRP. Such component of the counter claims, it is argued, was not covered by the Resolution Plan, since the authority of the Resolution Professional and the Adjudicating Authority under the IBC are restricted to pre-CIRP claims