# In the matter of Diamond Traexim Private Limited (IB)-1029(ND)2020

> NCLT judgment dated 2020-12-14. Citation: TCN-2020-NCLT-00092. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 14 Dec 2020
- **Citation:** TCN-2020-NCLT-00092
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/diamond-traexim-private-limited-ib-1029nd2020-35f9a6d9

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by M/s Shree Jindal Soya Limited (Operational Creditor) to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Diamond Traexim Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on payments related to a High Seas Sale Agreement for the supply of Crude Palm Oil. The Corporate Debtor raised an objection based on a pre-existing dispute, citing a pending proceeding under Section 34 of the Arbitration and Conciliation Act, 1996.

## Facts

M/s Shree Jindal Soya Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against M/s Diamond Traexim Private Limited (Corporate Debtor). The Operational Creditor and Corporate Debtor entered into a High Seas Sale Agreement dated 2018-09-18, under which the Operational Creditor supplied Crude Palm Oil to the Corporate Debtor. The Operational Creditor raised an invoice No. 15/2018-19 dated 2018-09-18 for Rs.8,28,00,000. The Corporate Debtor failed to make the payments, leading the Operational Creditor to initiate Arbitral Proceedings, resulting in an Arbitration award dated 2019-09-24. The Operational Creditor sent a Demand Notice dated 2020-07-10 under Section 8

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## Issues and analysis

### Issue 1: Whether the pendency of a petition under Section 34 of the Arbitration and Conciliation Act, 1996, …

**Ratio:** The filing of a Section 34 petition against an Arbitral Award demonstrates a pre-existing

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**Reasoning:** The court reasoned that the subject matter of the arbitration proceedings and the debt

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**Interpretation:** The term 'dispute' under the IBC is interpreted broadly to include any suit or

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**Application:** In this case, the Corporate Debtor had filed a petition under Section 34 of the

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## Parties

- **Judges:** SHRI. ABNI RANJAN…; Shri. L. N.…
- **Appellants:** M/s Shree Jindal…
- **Respondents:** M/s. Diamond…

## Timeline

- **2018-09-18 — High Seas Sale…**: Execution of High Seas Sale Agreement between the Operational Creditor and the Corporate…
- **2018-09-18 — Invoice R…**: Operational Creditor raised invoice…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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