The National Company Law Tribunal (NCLT) in Chennai has formally dismissed an insolvency petition filed by Carlsberg India Private Limited against Accord Distillers and Brewers Private Limited. The ruling, delivered on 16 October, centers on a contested claim for bottle underwriting charges, with the Tribunal determining that the dispute constitutes a genuine, pre-existing disagreement that precludes the initiation of insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) of 2016.

The legal impasse originated from a 4 March 2015 licence agreement, which granted Accord the exclusive right to brew, bottle, and market Carlsberg’s products across Tamil Nadu. While the contractual relationship had functioned for several years, financial tensions surfaced regarding unpaid royalties, bottle sale dues, and interest on delayed payments. These issues were compounded by disagreements over "bottle underwriting charges"—a levy Carlsberg imposed to cover losses related to bottle consumption, which Accord argued were unsupported by transparent data.

Settlement and Unresolved Financial Claims

The relationship between the two entities had previously navigated insolvency proceedings, which resulted in a settlement agreement signed on 16 November 2022. Under this arrangement, Accord agreed to address outstanding dues to ensure continued operations. However, Carlsberg later alleged that Accord defaulted on the timeline for these payments, asserting that the settlement amount of ₹14.21 crore was transferred with significant delay in March 2023. Furthermore, Carlsberg contended that of the remaining outstanding balances, Accord had only remitted ₹1.15 crore despite repeated formal reminders.

As the litigation progressed, the total claim articulated by Carlsberg reached ₹11.27 crore. This figure was composed of ₹6.69 crore in royalties, ₹5.19 lakh for bottle sales, and ₹1.46 crore in accrued interest on delayed payments. The most significant point of friction remained the ₹3.06 crore claim for bottle underwriting costs. Carlsberg admitted during the proceedings that this specific figure was calculated tentatively, relying on limited information regarding bottle consumption and damage rates, as it alleged that Accord had failed to disclose comprehensive data required for a final audit.

In response to the insolvency petition, Accord Distillers and Brewers maintained that these charges were not only disputed but also entirely outside the scope of an "operational debt." The company expressed a clear willingness to clear all legitimate outstanding invoices related to royalties and bottle sales, while firmly contesting the underwriting costs. This distinction became the pivot point of the Tribunal’s decision.

The Threshold for Insolvency Proceedings

During the hearing, the NCLT Bench, comprising Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy, urged the parties to resolve the underwriting cost impasse. Carlsberg, however, declined to offer any concessions or compromises. Following this, Accord transferred ₹8.21 crore to Carlsberg, effectively settling the undisputed portions of the royalty and bottle sales invoices. Carlsberg acknowledged receipt of these funds, but the demand for the ₹3.06 crore underwriting balance remained active, leaving the insolvency petition effectively narrowed to that contested sum.

The Tribunal ultimately sided with the respondent, reasoning that the IBC is not a mechanism for recovering disputed, unliquidated claims. The Bench emphasized that the nature of the underwriting charges required a deeper level of investigation into the underlying contractual obligations and performance metrics than what is permitted under the summary nature of Section 9 of the Code. The Court observed:

“A claim that is merely tentative, unliquidated, or an un adjudicated claim for damages/costs cannot constitute a 'debt due and payable' to trigger insolvency under Section 9… A claim that has not attained finality or certainty does not satisfy the statutory threshold of a 'debt due and payable' under Section 3(11) read with Section 5(21) of the Code.”

Clarifying the Scope of Operational Debt

The NCLT’s decision underscores a fundamental principle of Indian insolvency law: the necessity of an undisputed debt for the activation of statutory recovery measures. By highlighting that Carlsberg had itself characterized the ₹3.06 crore as a tentative calculation based on incomplete documentation, the Tribunal established that there was no "clear and ascertainable" debt that could serve as the basis for a corporate insolvency resolution process.

The Bench concluded that the conflict over these charges arose well before the issuance of the statutory demand notice, meeting the legal criteria for a "pre-existing dispute." In the view of the Tribunal, allowing the insolvency process to proceed on the basis of a disputed, unliquidated calculation would circumvent the appropriate forums designed for resolving commercial contract disputes. The Bench held:

“We are satisfied that there existed a real and bona fide pre-existing dispute with regard to bottle underwriting costs between the parties prior to issuance of the statutory demand notice.”

Consequently, the Tribunal dismissed the petition, effectively closing the door on this particular insolvency action. The ruling mandates that for such claims to reach the NCLT, they must be substantiated with a degree of certainty that removes them from the realm of contestable damages or estimated costs. For the parties involved, the immediate effect is that while the primary insolvency threat is removed, the underlying dispute regarding the ₹3.06 crore in underwriting charges remains unresolved. The parties are now expected to seek recourse through civil courts or arbitration to determine the veracity of these claims, as the NCLT has firmly indicated that the IBC provides no remedy for such unresolved commercial disagreements.