# In the matter of Airis Pharma Private Limited

> NCLT judgment dated 2024-02-23. Citation: TCN-2024-NCLT-02409. Biocon Pharma Limited, the Operational Creditor (OC), filed an application against Airis Pharma…

- **Court:** NCLT
- **Order date:** 23 Feb 2024
- **Citation:** TCN-2024-NCLT-02409
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/airis-pharma-private-limited-fc342634

## Summary

### Background

Biocon Pharma Limited, the Operational Creditor (OC), filed an application against Airis Pharma Private Limited, the Corporate Debtor (CD), seeking to initiate the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC). The dispute arose from a Licensing and Supply Agreement entered into on April 22, 2021, where the CD was to develop and obtain necessary approvals for manufacturing and commercializing a pharmaceutical product, including filing an Abbreviated New Drug Application (ANDA) with the FDA. The OC was to provide supporting documents, including Risk Evaluation and Mitigation Strategy (REMS) Authorization. The OC disbursed 70% of the licensing fees (USD 950,000) plus IGST. The FDA did not approve the ANDA

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## Facts

Biocon Pharma Limited (OC) and Airis Pharma Private Limited (CD) entered into a Licensing and Supply Agreement on 22.04.2021 for in-licensing a pharmaceutical product. Airis Pharma was to develop and obtain FDA approval for the product, while Biocon was to provide supporting documents, including REMS Authorization. Biocon disbursed USD 950,000 (70% of licensing fees) plus IGST. The FDA rejected Airis's ANDA filing due to deficiencies in Biocon's REMS Authorization. Biocon terminated the agreement on 21.04.2022 and demanded a refund. Airis refused, citing Biocon's failure to provide proper REMS Authorization. Airis initiated arbitration proceedings. Biocon issued a demand notice under Section 8 of IBC on 21.10.2022. Airis had raised the issue of improper REMS with

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the IBC should be admitted given the existence of a …

**Ratio:** The Insolvency and Bankruptcy Code (IBC) is not intended to be a tool for recovery of

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**Reasoning:** The court reasoned that the Corporate Debtor had raised a valid dispute regarding the

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**Interpretation:** The interpretation of Section 9 of the IBC, as clarified by the Supreme Court

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**Application:** In this case, the court applied the ratio by finding that the dispute over the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Biocon Pharma…
- **Respondents:** Airis Pharma Pvt…

## Timeline

- **2021-04-22 — Licensing and Supply…**: Biocon Pharma Limited and Airis Pharma Private Limited entered into a Licensing and…
- **2022-01-19 — FDA Official…**: Emails from FDA Official Ms.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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