State Bank of India v. Jet Airways (India) Limited, the National Corporation Law Tribunal, Mumbai Bench ("NCLT") concluded that foreign courts cannot interfere or establish parallel procedures for the bankruptcy proceedings of an Indian company. In order to start the corporate insolvency resolution process (CIRP) against Jet Airways (India) Limited (hereinafter referred to as "Jet Airways"), the State Bank of India submitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the "Code"). This application was combined with those submitted by operational creditors under Section 9 of the Code. The NCLT was informed of the insolvency proceedings against Jet Airways that had already been started by a Dutch Court while it was being considered (the Noord Holland District Court). In the Noord Holland District Court's ruling from May 21, 2019, Mr R. Mulder (the "Intervener") was named Jet Airways' "administrator in bankruptcy."
In the instant case titled State Bank of India v. Jet Airways (India) Limited the issue raised for clarification before the NCLT was:
Considering ongoing parallel actions at the Noord Holland District Court in the Netherlands, is the CIRP against Jet Airways maintainable before the NCLT?
With regard to this issue, The NCLT examined the arguments made by the Intervener. Although Sections 234 and 235 of the Code address issues relating to agreements with foreign nations and a letter of request to a country outside India in the course of the insolvency resolution process where the assets of the corporate debtor exist outside India, the NCLT claimed that these sections have not yet been notified and are therefore ineffective. Additionally, the NCLT has jurisdiction because Jet Airways' registered office is in India. No other court has the authority to issue an order under the Code, according to the NCLT, because the governments of India and the Netherlands do not have a similar agreement. The NCLT also noted that Mr. Mulder's claim that issues will arise from the two simultaneous cases is unsupportable because the foreign court's order is illegal under international law and cannot be implemented.
The Noord Holland District Court's decision, which led to the start of bankruptcy proceedings against Jet Airways under Dutch law, was declared invalid by the NCLT. The resolution of Jet Airways' debt is of "national importance," it was further emphasised, given that the airline employs more than 20,000 people. The Bankruptcy Law Reforms Committee's report from November 2015, which stressed the importance of time, was further examined by the NCLT. With the aforementioned considerations in mind, the NCLT stated that any additional delays in the CIRP proceedings against Jet Airways would be against the provisions of the Code. Since both the debt and the failure to repay the debt are proven, the petition for invoking the CIRP was admitted, and a moratorium under Section 14 of the Code was imposed.
The NCLT categorically stated that,
“We make it clear that the 'Dutch Trustee (Administrator) will work in co-operation with the 'Resolution Professional of India' and, if any, the suggestion is required to be given, he may give it to the 'Resolution Professional'. The draft of the 'Cross Border Insolvency Protocol' clause is made final as above. It should be treated as a director of this Appellate Tribunal and it would be mandatory to Company Appeal (AT) (Insolvency) No. 707 of 2019 to comply with the order of this Appellate Tribunal subject to the other procedures which are to be followed in terms of the 'Insolvency and Bankruptcy Code, 2016'”