AN INSPECTION OF LEGAL DILEMMA IN ARBITRATION PROCEEDINGS AND INSOLVENCY PROCEEDINGS

Arbitration proceedings are intended to resolve the dispute between contractual parties according to the contract by which parties bind and govern by the mutually decided laws. Arbitration and Conciliation Act 1996 derived its source from UNICTRAL model law on International Commercial Arbitration in 1985. Whereas, the Insolvency proceedings are right in rem means that it can adjudicate the claim of people. The Insolvency & Bankruptcy Code 2016(IBC) enacted after repealing Act i.e., Sick Industrial Companies Act (SICA) which is a paradigm shift from debtor centric to creditor centric. It is pertinent to discuss that whether the conflict between Insolvency proceedings and Arbitration proceedings runs simultaneously or not? In India, Law is not clear in this regard so it can be resolved by two folded arguments, first, that the moratorium issued under Section 14 of IBC bars the jurisdiction of the Arbitration Tribunal. Secondly, that the law IBC has overriding effect over the law which governs the arbitration proceeding. The law is not clear about the status of both the proceedings run simultaneously. It is a well settled law that as soon as the moratorium order has been passed by the tribunal then all the legal proceeding has been stayed till the disposal of the moratorium order pending against the corporate debtor.