# In the matter of Jay Ace Technology Limited

> NCLT judgment dated 2023-07-31. Citation: TCN-2023-NCLT-02259. The case involves an application filed by Abdulhadi Almailem Trading Company, an operational…

- **Court:** NCLT
- **Order date:** 31 Jul 2023
- **Citation:** TCN-2023-NCLT-02259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jay-ace-technology-limited-e8b0a7f0

## Summary

### Background

The case involves an application filed by Abdulhadi Almailem Trading Company, an operational creditor, against Jay Ace Technologies Limited, a corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The operational creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor due to unpaid operational debt. The corporate debtor is registered with ROC, NCT of Delhi & Haryana.

## Facts

Abdulhadi Almailem Trading Company, a Kuwait-based company, is engaged in trading automotive parts and lead-acid batteries. Jay Ace Technologies Limited, an India-based company, manufactures automotive batteries. A distribution agreement was executed between the parties on February 1, 2018, appointing Abdulhadi Almailem as the exclusive distributor for 60 months. The agreement included a clause (2.3.3) stating that the Corporate Debtor shall replace all mode wise defective batteries if quality failure is above 5%. 33 transactions occurred between the parties. The batteries sold to the Operational Creditor were returned from the market as defective. A meeting was held, and the Corporate Debtor agreed to replace the defective batteries, documented in a Minutes of Meeting

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor has failed to prove the existence of a pre-existing dispute before the …

**Ratio:** The existence of a 'pre-existing dispute' must be demonstrated before the issuance of a

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**Reasoning:** The court perused the records and found that the Corporate Debtor only raised the issue

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**Interpretation:** The interpretation of 'pre-existing dispute' requires that the dispute must be

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**Application:** In this case, the Corporate Debtor's claim of a pre-existing dispute was not

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** Abdulhadi…
- **Respondents:** Jay ACE Technologi…; Jay Ace Technology…

## Timeline

- **2018-02-01 — Distribution A…**: A distribution agreement was executed between Abdulhadi Almailem Trading Company and Jay…
- **2019-09-03 — Minutes of…**: Representatives of both parties signed a Minutes of Meeting acknowledging defective…

## 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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