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2022 (12) TMI 1060 - DELHI HIGH COURTSeeking appointment of a sole arbitrator for the resolution of disputes between the parties - Section 11 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- To answer this issue, it is necessary to go into the effect of the said order staying the institution or continuation of suits or other proceedings by any party or person or bank or company against IL&FS and its 348 Group Companies in any Court of law, tribunal, arbitration panel or arbitration authority. In this regard the plea of Mr. Mehta is that during the resolution process of a company, its creditor is obligated to necessarily lodge claims before a resolution professional, as a successful resolution applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted. This would amount to a “hydra-head popping up” which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully takes over the business of the corporate debtor. The purpose and rationale behind granting a moratorium is to ensure that the assets of the corporate debtor are protected, with an intention to keep the company a going concern and to use the period to strengthen its financial position. It means, the intent of the order of the NCLAT is to protect the assets of IL&FS and its group companies in order to make the resolution process effective/purposeful. In any case, the legality of the order dated March 12, 2020 confirming the order dated October 15, 2018 has been challenged before the Supreme Court. Since, the matter is pending before the Supreme Court and there is no stay of the NCLAT order, the petitioner has to await adjudication of the proceedings before the Supreme Court. Petition dismissed.
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