Arbitral award unenforceable when claims are not part of insolvency resolution plan: Supreme Court

The Supreme Court has delivered a significant ruling clarifying the interplay between arbitration proceedings and the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC). The apex court held that an arbitral award, even if legitimately obtained, becomes unenforceable if the underlying claims that led to the award were not submitted and considered as part of the approved insolvency resolution plan. This judgment underscores the paramount importance and binding nature of the resolution plan once it receives the NCLT's approval. It emphasizes that the IBC provides a comprehensive framework for dealing with the debts and liabilities of a corporate debtor, and any claims that are not factored into this framework stand extinguished after the plan is finalized. This ruling aims to ensure the sanctity and finality of the resolution process.