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The presence of an e�ective arbitration regime forms an indispensable

part of modern commercial dispute resolution. However, in case
of bona de dispute between parties with an arbitration clause
concerning the quantum and existence of debt where the creditor also
has the right to apply for initiation of corporate insolvency resolution
process, there arises a con ict between arbitration and insolvency
regime. The con ict is regarding the role to be played by arbitration
in the determination of alleged debt in situations where rights
under the Insolvency regime are available to the creditor. The latest
development in this regard is the decision of the three-judge bench of
Hon’ble Supreme Court in Indus Biotech v. Kotak India Venture. While
analysing this decision with a primary focus on conducting an in-
depth analysis of the competing interest between the arbitration and
insolvency regime, the authors explain the anomalies underlying the
two crucial issues where the court has erred - misinterpretation of
the term “default” and failure of the court to reconcile the arbitration
and insolvency regimes harmoniously. The authors further delve into
the position of law in other jurisdictions on the issue of standard of
review to be adopted. Lastly, the article suggests solutions such as
the adoption of prima facie standard of review with provisions for

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The GNLU Law Review - Volume 8 │ December 275

fast-track arbitration and e�ective implementation of information

utilities to achieve a harmonious balance between these regimes
to ensure that intent and purpose associated with these regimes is
preserved.

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(P) Ltd. v. Kotak India Venture (O�shore) Fund (hereinafter ‘Indus
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DQG� &RQFLOLDWLRQ� $FW [“Arbitration Act”] has nally decided the
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than it solves. The article will seek to unravel some patent aws in
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Indus Biotech (P) Ltd. v. Kotak India Venture (O�shore) Fund, (2021) 6 SCC 436 : 2021
SCC OnLine SC 268 (hereinafter ‘,QGXV�%LRWHFK¶
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276 INDUS BIOTECH V. KOTAK INDIA VENTURE

Resolution Process (“CIRP”) claiming to be a nancial creditor of

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In the judgment, the court rstly held that the Code shall override
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legal proceeding under Section 7 of the Code, the court must rst
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can be referred to arbitration only when the court is satis ed that no
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³determination of default” (hereinafter ‘Swiss Ribbons’). � 7KH� UHDVRQV�
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Indus Biotech (P) Ltd. v. Kotak India Venture Fund- I, 2020 SCC OnLine NCLT 1430.
Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17 : 2019 SCC OnLine SC 73, ¶ 37
(hereinafter ‘Swiss Ribbons¶