Essar Steel case: NCLT concludes hearing on Arcelor's plan, reserves order

Written submissions from all sides including ArcelorMittal, Committee of Creditors and Resolution Professional have been invited by February 18

The stage is set for a landmark order by the bench of the National Company Law Tribunal (NCLT), on approval or rejection of the Rs 42,000-crore takeover bid by ArcelorMittal of insolvent Essar Steel. 

With the marathon hearing having concluded, on the bid and objections by several parties against it, the tribunal has reserved the matter for its order. Meantime, written submissions from all sides —including ArcelorMittal, the Committee of Creditors (CoC) and the Resolution Professional (RP) — have been invited by the coming Monday. 

Part of the original list of 12 major defaulters in which the corporate insolvency resolution process (CIRP) was initiated under the Insolvency and Bankruptcy Code (IBC), the Essar Steel case has prolonged for 570 days. The hearing concluded on Thursday with the RP, CoC and ArcelorMittal making their final arguments and clarifying their stance on financial and legal concessions sought by the latter as part of its resolution plan. 

The RP’s counsel told the bench of Harihar Chaturvedi and Manorama Kumari that ArcelorMittal’s bid had been verified and found to be compliant with the IBC rules and the October 2018 order of the Supreme Court (SC). 

Seconding the RP, legal counsel for the CoC said the lenders’ panel had considered both Vedanta and ArcelorMittal’s bids on the basis of the SC’s order and found the latter’s bid the “best available plan”. ArcelorMittal’s counsel told the tribunal its bid had complied with all directions by the courts and the IBC norms. Nor was its resolution plan contingent on certain concessions in terms of tax accrual and other items it had sought from the tribunal.

NCLT also dismissed a new plea from Essar Steel Asia Holdings (ESAHL), the promoters of Essar Steel India, seeking a copy of ArcelorMittal’s resolution plan as shareholders of the company. The tribunal held the  plea could not be entertained, on the lines of its previous order where it had dismissed their offer of Rs 54,000 crore as a settlement plan for Essar Steel. The tribunal had earlier found ESAHL's proposal to be non-maintainable and said there was no illegality or irregularity in the CoC's decision to not consider it.

Karur Vysya Bank (KVB) was asked for written submissions on its plea against ArcelorMittal's plan. The bank had petitioned to seek dues worth over Rs 3 crore accruing out of KSS Petron, in which ArcelorMittal was a related party. However, counsels for the CoC and the RP had objected that the bank was too late, its claims having been accepted by KSS Petron's RP after the SC deadline of October 18. This last date was for both ArcelorMittal and Vedanta to pay off their dues, the CoC told NCLT. "It is only on October 19, 2018, that KVB applies for its claim with KSS Petron's RP, which the latter accepted on October 31," the CoC said, adding the bank should now approach the apex court and not the tribunal. However, the NCLT said it would pass an order, based on the bank's written plea.

On Wednesday, the bench had reserved for its order the matter of Essar Steel's suspended management seeking a copy of ArcelorMittal's resolution plan, invoking a right to comment on this. It also reserved for order the petitions filed by operational creditors, unsecured financial creditor Standard Chartered Bank  and some firms seeking operational claims.