Arbitration clauses in Memoranda Of Understanding (MOU) do not bar insolvency proceedings when debt and default are established, the National Company Law Tribunal’s Mumbai bench has held while admitting PS IT Infrastructure & Services Ltd into insolvency.
“The presence of an arbitration clause in an MoU does not oust the jurisdiction of the Adjudicating Authority while dealing with an application under Section 7 of the Code. The existence of an arbitration clause in the MoU does not bar the admission of a Section 7 application under the IBC.”
A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar admitted the insolvency plea filed by Golden Medows Export Pvt. Ltd. after finding that a financial debt of ₹3.10…