Reconciling Conflicts: The Evolving Validity And Enforceability Of Arbitration
- IJLLR Journal
- 1 hour ago
- 1 min read
Saksham Yadav, BA.LL.B., Batch (2020-2025), Fairfield Institute of Management and Technology affiliated to Guru Gobind Singh Indraprastha University, New Delhi
ABSTRACT
This article delves into the complex interaction between the Insolvency and Bankruptcy Code, 2016 (IBC) and the Arbitration and Conciliation Act, 1996. It concentrates on how insolvency proceedings impact arbitration agreements and arbitral awards. While the main objective of IBC is to protect the interests of creditors through a collective debt resolution process. This Act imposes a moratorium under Section 14 that suspends all legal actions, including arbitration, against the corporate debtor, which often leads to conflicts with the Arbitration Act, which upholds party autonomy and contractual dispute resolution mechanisms. This article examines key judicial decisions addressing whether arbitration proceedings and the enforcement of arbitral awards can continue during the moratorium period. It discusses circumstances where mutual claims exist and examines how the Indian Courts have attempted to balance the objectives of both statutes. The article also highlights unresolved legal questions and proposes improvements such as clarifying Section 14 of the IBC and encouraging detailed arbitration clauses to address the possibility of insolvency. Ultimately, the article argues for a more harmonized approach to ensure that neither the insolvency process nor the contractual rights of parties are unfairly compromised.
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