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CS Professional · Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

Meridian Textiles Ltd is undergoing CIRP before the NCLT, Mumbai. Its subsidiary, Meridian Exports Pvt Ltd, is situated in India, and a foreign supplier has made a claim against that subsidiary. Under the Code's provisions on the Adjudicating Authority, where does jurisdiction over this claim lie?

The NCLT has jurisdiction. The Code empowers it to entertain claims by or against the corporate debtor, including claims by or against its subsidiaries situated in India, notwithstanding any other law. The foreign nationality of the claimant does not shift the matter to a civil court, foreign court or the Board.

  1. AThe NCLT has jurisdiction, since claims by or against subsidiaries situated in India of the corporate debtor fall within its jurisdictionCorrect
  2. BOnly the civil court, because the claimant is a foreign party
  3. COnly the foreign court of the supplier's country
  4. DThe Insolvency and Bankruptcy Board, as it regulates cross-border claims

Explanation

Section 60(5)(b) gives the NCLT jurisdiction over any claim by or against the corporate debtor or corporate person, including claims by or against subsidiaries situated in India, notwithstanding any other law. The claimant's foreign nationality does not remove it. Civil courts and the Board are not given this jurisdiction.

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