# In the matter of Chennai Metro Rail Limited Vs. Lanco Infratech Limited and Ors. Application No.2826 of 2019

> HC judgment dated 2020-10-15. Citation: TCN-2020-HC-00010. The applicant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996,…

- **Court:** HC
- **Order date:** 15 Oct 2020
- **Citation:** TCN-2020-HC-00010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/chennai-metro-rail-limited-vs-lanco-infratech-limited-and-ors-application-no2826-52dd776a

## Summary

### Background

The applicant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, seeking a stay of arbitral proceedings until leave is obtained from the NCLT, Hyderabad, under Section 279 of the Companies Act, 2013, to proceed with the arbitration. This was due to a moratorium imposed on the 1st Respondent by NCLT, Hyderabad, followed by a liquidation order and the appointment of a liquidator.

## Facts

M/s. Chennai Metro Rail Limited (Applicant) and M/s. Lanco Infratech Limited (1st Respondent) entered into a contract on September 5, 2011 , for the Design and Construction of Elevated Station at Meenambakkam, including Architectural Builders Works and Finishes (ABWF) and Building Services Work (BS) for the Chennai Airport Station, Viaducts, Ramps, and Cut-cover Tunnel. This project was designated as the ECV-07 package. A dispute arose between the parties, leading to the matter being referred to arbitration. The 1st Respondent, as the claimant, sought an aggregate sum of Rs.1,98,58,82,734/-. The Applicant, as the respondent in the arbitral proceedings, filed a counter-claim for Rs.107 Crores. After the evidence phase, a moratorium was imposed on the 1st Respondent by

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## Issues and analysis

### Issue 1: Whether leave from the NCLT is required under Section 279 of the Companies Act, 2013, to continue …

**Ratio:** The IBC, being a special law, prevails over the Companies Act, 2013. Therefore, leave

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**Reasoning:** The court reasoned that the Insolvency and Bankruptcy Code, 2016 (IBC) is a special law

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**Interpretation:** The court interpreted Section 238 of the IBC as giving it primacy over other

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**Application:** Given that the IBC is a special law and its provisions do not explicitly

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## Parties

- **Judges:** N. SATHISH…
- **Appellants:** M/s. Chennai…
- **Respondents:** M/s. Lanco…; Mr.K.D. Arcot…; +2 more
- **Advocates:** For Appli…; ARVIND PA…; +5 more

## Timeline

- **September 5, 2011 — Contract E…**: Applicant and 1st Respondent entered into a contract for the Design and Construction of…
- **August 7, 2017 — Moratorium…**: National Company Law Board, Hyderabad,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(5) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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