General
Mumbai: The National Company Law Tribunal has refused to reopen long-standing commercial agreements at Arshiya Panvel free trade and warehousing zone, ruling that these arrangements cannot be challenged years after they were signed, during insolvency proceedings.
The tribunal’s Mumbai bench, in its order delivered on December 19, dismissed Arshiya’s resolution professional’s plea seeking to invalidate key clauses in lease and framework agreements signed with Ascendas Panvel FTWZ. The ruling clears the way for the contracts to continue as originally executed.
Arshiya, which is undergoing corporate insolvency resolution after an NCLT admission order in March 2024, had argued that the agreements restricted its ability to freely use a large portion of its Panvel land and discouraged potential resolution applicants.
The resolution professional claimed that the clauses suppressed the company’s value and stood in the way of maximising recoveries for creditors.
At the centre of the dispute was a clause of a 2018 master lease deed, which requires Arshiya to obtain Ascendas’ prior written consent before selling, leasing or raising finance against 125 acres of reserved SEZ land at the Panvel FTWZ.
The RP also challenged a related framework agreement that gives Ascendas priority rights for financing and leasing of any additional warehouses developed on the land.
The tribunal noted that these agreements were entered into more than six years before the insolvency process began and had been fully acted upon by Arshiya. It held that attempts to declare contractual terms invalid on grounds such as public policy are subject to time limits and cannot be raised belatedly during insolvency proceedings.