In a significant ruling, the Supreme Court partly allowed an appeal, holding that while counterclaims not filed during insolvency proceedings stand extinguished under the Insolvency and Bankruptcy Code (IBC), a limited set-off defence may still be raised in arbitration.
The dispute arose from a 2017 rooftop solar project contract awarded to Ujaas by the West Bengal Power Development Corporation. Following insolvency proceedings initiated against Ujaas in 2020, the company’s resolution plan was approved in October 2023. During arbitration, the respondent sought to press a counterclaim that had not been filed before the Resolution Professional during the Corporate Insolvency Resolution Process (CIRP).
The …