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- Integrated corporate structures may justify lifting the corporate veil in CIRP
- Unsuccessful parties can seek post-award interim relief
- GST cannot be levied on damages paid under an arbitral award
- Market definition under competition law must reflect functional dependence and economic reality
- CIRP costs must be directly linked to the resolution process and approved by the CoC
- Extension of arbitrator’s mandate is permissible even after lapse of time limit
Integrated corporate structures may justify lifting the corporate veil in CIRP
Alpha Corp Development Pvt Ltd v. GNIDA
Supreme Court of India | Civil Appeal No. 1526 of 2023
The Supreme Court held that while subsidiary companies are ordinarily distinct legal entities, the corporate veil may be lifted in appropriate cases during insolvency proceedings where group entities are functionally and economically integrated. The judgment strikes a careful balance between commercial reality and legal structure by recognising the practical realities of integrated real estate projects while simultaneously rea)irming that Corporate Insolvency Resolution Process (CIRP) cannot ordinarily be used to bypass ownership boundaries or third-party rights.
The ruling is likely to have significant implications for real estate insolvencies and group company structures, and underscores the need for careful structuring of resolution plans with due regard to title, leasehold arrangements, and contractual restrictions.
SUMMARY OF FACTS
The dispute concerned real estate projects developed on lands leased by the Greater Noida Industrial Development Authority (GNIDA) to subsidiaries/Special Purpose Vehicle (SPV) entities of Earth Infrastructures Ltd (EIL). While legal title vested with the subsidiaries, the projects were effectively controlled and executed by EIL.
Meanwhile, insolvency was initiated against EIL, and the resolution plan sought to deal with the assets allotted to the subsidiaries/SPV entities of EIL.
GNIDA challenged the approval of the plan before the National Company Law Appellate Tribunal (NCLAT) on the grounds that the lands did not belong to EIL and that its consent as lessor had not been obtained.
The NCLAT accepted GNIDA’s objections, holding that subsidiary assets could not be treated as assets of the corporate debtor, relying on BRS Ventures.1
This order was challenged before the Supreme Court.
DECISION OF THE COURT
The Supreme Court held that, although subsidiary companies are ordinarily distinct legal entities separate from their holding company, the present case warranted lifting of the corporate veil owing to the functional and economic integration between EIL and its subsidiary/SPV entities.
Relying upon ArcelorMittal,2 the Court reiterated that the corporate veil may be lifted where associated companies are so inextricably connected as to form part of a single economic concern, particularly where public interest and equitable considerations are involved.
Noting that EIL was either the holding company or the lead member with 98% control, it was the real developer undertaking construction, marketing the projects, collecting monies from homebuyers, and substantially bearing the financial burden of payments due to GNIDA. The subsidiary/SPV entities had little independent commercial existence apart from holding leasehold rights over the project lands.
Importantly, GNIDA itself was fully aware that EIL was executing and controlling the projects and had itself acknowledged EIL’s developmental role in prior correspondence. Therefore, it could not subsequently rely upon rigid corporate separateness to isolate the SPVs and their development rights from EIL’s insolvency.
Ultimately, as the subsidiary/SPV entities were merely a ‘front’ for the projects, behind which EIL was the ‘main driving force’, this was an ‘eminently fit case’ for lifting the corporate veil. A purely technical interpretation that would defeat project resolution and prejudice homebuyers was rejected.
Unsuccessful parties can seek post-award interim relief
Home Care Retail Marts Pvt Ltd v. Haresh N Sanghavi
Supreme Court of India | 2026 SCC OnLine SC 670
In a landmark decision, the Supreme Court has clarified that an unsuccessful party can seek interim measures under Section G of the Arbitration and Conciliation Act, 1GGC (Act) at the post-award stage. Importantly, the decision balances this expansive interpretation with a cautionary principle that, while access to Section G cannot be denied to an unsuccessful party, the threshold for the grant of relief in such cases must remain significantly higher, and must be granted only in rare and compelling cases, subject to a substantially higher threshold. This safeguard is likely to prevent routine or tactical interim relief applications intended to delay enforcement of arbitral awards.
The ruling is expected to have a considerable practical impact in high-value commercial arbitrations, particularly where immediate enforcement of an award may cause irreversible prejudice before adjudication of the award’s challenge.
SUMMARY OF FACTS
Disputes arose between the parties under a contractual arrangement, culminating in arbitral proceedings at the conclusion of which an award was rendered.
Aggrieved, the unsuccessful party challenged the award under Section 34 of the Act, and simultaneously, sought to invoke Section 9 of the Act seeking interim relief pending adjudication of the challenge.
This raised a broader legal issue as to the maintainability of a petition for interim relief under Section 9 of the Act at the behest of an unsuccessful party in arbitration.
Due to a divergence in judicial opinion on this issue, with several High Courts restricting post-award interim relief to successful parties alone, while others permitted even unsuccessful parties to seek such protection, the matter was referred to the Supreme Court.
DECISION OF THE COURT
The Supreme Court held that any party can seek post-award interim protection under Section 9, irrespective of whether it succeeded or failed in the arbitral proceedings.
The expression ‘a party’ under Section 9 must be given its plain and literal meaning, thereby including any party to the arbitration agreement. Interpreting this expression to only mean the successful party introduces a limitation not found in the text, effectively rewriting the statute. Where statutory language is clear and unambiguous, Courts cannot impose artificial distinctions based on perceived legislative intent.
Where the unsuccessful party has challenged the award under Section 34, limiting the application of Section 9 to successful parties alone leaves such an unsuccessful party without any meaningful remedy, especially where the award may ultimately be set aside or modified.
At the same time, the Court introduced an important safeguard by observing that the threshold for granting interim relief to an unsuccessful party must be significantly higher, and may be granted only in rare and compelling circumstances. Ultimately, the invocation of Section 9 by an unsuccessful party must be subject to careful judicial scrutiny.
Footnotes
1 BRS Ventures Investments Ltd v. SREI Infrastructure Finance Ltd, (2025) 1 SCC 456
2 ArcelorMittal India Pvt Ltd v. Satish Kumar Gupta, (2019) 2 SCC 1
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