The Bombay High Court has held that an insolvency moratorium does not prevent a corporate debtor from pursuing its own claims in arbitration, including a counterclaim against the party that initiated proceedings against it.
Justice Somasekhar Sundaresan observed,
“Section 14(1)(a) of the IBC interdicts the institution and continuation of proceedings against the corporate debtor. It does not bar proceedings initiated by the corporate debtor, including a Counter Claim.”
The dispute arose from a development agreement executed between A A Estates Pvt. Ltd. and Govind Co-operative Housing Society Ltd., in 2010. Alleging that the redevelopment had stalled and transit rent had remained unpaid, the society terminated the…