SC sets aside NCLAT order approving ArcelorMittal’s bid to acquire Essar Steel

SC also relaxes the timeline of 330 days to find a resolution plan as prescribed under the Insolvency and Bankruptcy Code

(FILES) A file photo taken on January 25, 2012 shows the logo of Arcelor Mittal as its steel plant in Villaverde, near Madrid. - ArcelorMittal announced on October 12, 2018 that it has reached an agreement to sell four of its European sites to Liberty House in order to address European competition concerns as part of its proposed acquisition of Italy's Ilva. The four steel plants, located in Romania, the Czech Republic, Macedonia and Italy, employ more than 12,500 people. (Photo by Dominique FAGET / AFP)

The Supreme Court on Friday set aside the July 4 order of the NCLAT approving ArcelorMittal’s ₹42,000-crore bid for acquiring debt-laden Essar Steel.

A Bench headed by Justice R.F. Nariman quashed the National Company Law Appellate Tribunal (NCLAT) order which had given financial creditors equal status with operational creditors in the distribution of ArcelorMittal’s bid amount.

The top court also relaxed the timeline of 330 days to find a resolution plan as prescribed under the Insolvency and Bankruptcy Code.

The Bench clarified that financial creditors enjoy primacy and the adjudicating authority cannot interfere with the decision approved by the committee of creditors.