Supreme Court: Operational creditors cannot continue civil suits or arbitration after resolution plan approval if claims were not crystallised

The Supreme Court has held that operational creditors cannot continue civil suits or arbitration proceedings for pre-insolvency dues after approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC), if their claims had not crystallised by the effective date of the plan. Reiterating the ‘clean slate’ principle, the Court ruled that pending claims which remain unquantified stand extinguished unless expressly preserved in the approved resolution plan.A Bench of Justice Manoj Misra and Justice Manmohan held that allowing unresolved claims to survive the…