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Informist, Friday, Jan. 9, 2026

 

NEW DELHI – The Delhi High Court Friday terminated INR 802.93 million arbitration proceedings started by ISGEC Heavy Engineering Ltd. against Tata Steel Ltd. ISGEC Heavy Engineering's dues were related to Bhushan Energy Ltd., which was taken over by Tata Steel through a corporate insolvency resolution process in 2019 and the name was changed to Angul Energy Ltd. Last year, Angul Energy merged into Tata Steel.

 

In view of the resolution plan being approved by the National Company Law Tribunal, the claim of ISGEC Heavy Engineering stood extinguished, and therefore, the arbitral tribunal did not have the jurisdiction to proceed further with the adjudication of the said claim, said the high court. The Supreme Court had held that a successful resolution applicant cannot be made to face undecided claims after the resolution plan is approved, said the high court. The top court had further held therein that lifting of the moratorium would not mean that the claim would stand revived notwithstanding the approval of such a plan by the tribunal, said the high court.

 

In 2006, Bhushan Energy had entered into three contracts with ISGEC Heavy Engineering. On account of various disputes pertaining to non-performance of the contractual obligations by Bhushan Energy, ISGEC Heavy Engineering initiated arbitral proceedings against the former. During the pendency of the arbitral proceedings, State Bank of India initiated insolvency proceedings against Bhushan Energy in 2017. 

 

In the insolvency proceedings, ISGEC Heavy Engineering submitted its claims before the resolution professional of Bhushan Energy. The resolution professional kept the claims of ISGEC Heavy Engineering as "contingent liability" in the insolvency process of Bhushan Energy. After the approval of Tata Steel's resolution plan, ISGEC Heavy Engineering sent a communication to the arbitral tribunal for restarting the proceedings as it received no claims in the insolvency proceedings. Challenging the arbitral tribunal's order to start the proceedings again, Tata Steel moved the high court.

 

Friday, shares of Tata Steel closed 1.0% lower at INR 178.40 on the National Stock Exchange and those of ISGEC Heavy Engineering Ltd. closed 3.0% lower at INR 829.60.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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