The financial year 2020-21 was significant in terms of legislative amendments and landmark judgements to assist businesses through the economic slowdown caused by the COVID-19 pandemic and resolve commercial disputes efficiently. Here we discuss some of the major developments in the past year and provide a brief overview on what to expect in the coming financial year.
THE YEAR THAT WAS
For the dispute resolution practice, the past financial year has been shaped primarily by the COVID-19 pandemic. Despite the initial disruption due to the national lockdown imposed by the Indian government, the legislature and judiciary moved swiftly to take measures to ensure fairness to pandemic-affected parties and seamless dispensation of justice.
The Insolvency and Bankruptcy Code, 2016 (IBC) remained suspended to prevent further strain on cash strapped businesses affected by the pandemic. An extension to the limitation period declared by the Supreme Court ensured that a party's right to seek relief against a counterparty was unaffected by delays caused due to the pandemic. Further, a significant transition, albeit temporary, of the judicial system to virtual meeting platforms offered a glimpse into the possible future of the Indian justice system.
The year also witnessed key developments in the insolvency and arbitration space. Pursuant to amendments to the IBC and related regulations in March 2020, initiation of corporate insolvency resolution process (CIRP) for defaults occurring since the pandemic-induced national lockdown remained suspended. Further, extensions for actions under CIRP and liquidation timelines were provided due to the nationwide lockdown. Separately, the Supreme Court provided much-needed clarity on the ability of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to adjudicate contractual disputes concerning a corporate debtor undergoing insolvency resolution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.