TC - 03 Respondent PDF

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19thSurana & Surana National Corporate Law Moot Court Competition 2021
TC- 03
19thSurana & Surana National Corporate Law Moot

Court Competition 2021
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

AT BENGALURU
Application No. 5/ 2021
IBC Application No. 100/ 2021
IN THE MATTER OF
Fugistar Diamond Singapore General Partnership
Rep by its Interim Receiver
Singapore … Applicant
vs.
Fugistar Diamond India Private Limited

Rep by its Interim Resolution Professional
Bengaluru … Respondent
APPLICATION FILED UNDER CLAUSE 12 OF INSOLVENCY AND

BANKRUPTY CODE CROSS BORDER INSOLVENCY
DRAFT MODEL LAW, 2018
WRITTEN SUBMISSIONS ON BEHALF OF THE

RESPONDENT
WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

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TABLE OF CONTENTS
LIST OF ABBREVIATIONS……………………….…………………….…………. …..4-5
LIST OF AUTHORTIES…………………………….………….……………………...... 6-9
STATEMENT OF JURISDICTION………………………………………………. …. ….10
STATEMENT OF FACTS……….………………………………………….……..............11
STATEMENT OF ISSUES …………………………………………………..................... 12
SUMMARY OF ARGUMENTS…………………….…………………………….…... …13
ARGUMENTS ADVANCED………………….………………….…………………....14-26
1. WHETHER APPLICATION BEFORE HON’BLE NATIONAL COMPANY LAW
TRIBUNAL SUSTAINABLE? ……………………………………………………….14-17
[1.1] THAT THE SUIT BROUGHT FORWARD IS OPPOSED TO PUBLIC
POLICY………………………………………………………………………………….14-15
[1.2] THAT IT IS NOT A FOREIGN MAIN PROCEEDING ………………………….15-16
[1.3] THAT IT IS NOT A FOREIGN NON-MAIN PROCEEDING…………………....16-17
2.WHETHER THE CENTRE OF MAIN INTREST’ LIES IN INDIA?

……………………………………………………………………………..16-21
[2.1] THAT THE COMPANY HAS BEEN INCORPORATED IN INDIA….…….…...17-18
[2.2] THAT THE APPLICATION FOR INSOLVENCY WAS FIRST FILED BY THE
INDIAN BANK IN INDIA. …………………………………………………………….19-20
[2.3] THAT THE ASSETS OF THE INDIAN COMPANY LOCATED IN INDIA SHOULD
BE SOLELY AND EXCLUSIVELY BE USED ONLY TOWARDS THE DUES OF THE
INDIAN BANK AND THE ASSETS OF THE SINGAPORE GP ……………….……20-21
3.WHETHER THE INSOLVENCY PROCEEDINGS CAN BE INITIATED AGAINST
THE GUARANTOR OF THE CORPORATE DEBTOR FOR THEIR
LIABILITY?…………………………………………………………………….…….23-27

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[3.1] THAT A CORPORATE GUARANTEE MAY BE AVOIDED ON ACCOUNT OF IT
BEING ULTRA VIRES THE COMPANY I.E., BEYOND THE COMPANY'S
CAPACITY……………………………….……………………………………………...23-24
[3.2] THAT DIRECTOR OF THE INDIAN COMPANY IS PERSONALLY LIABLE TO
THE EFFECT OF DOCTRINE OF ALTER EGO…………….………………....……….24-25
[3.3] THAT THE SINGAPORE BANK CANNOT BE PERMITTED TO HAVE ANY
CLAIMS OVER THE ASSETS LOCATED IN INDIA AND SINGAPORE…………...25-27
PRAYER…………………………………………………………………………………….28

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LIST OF ABRIVIATIONS
& And
Sec. Section
A.I.R. All India Reporter
Anr. Another
Art. Article
Co. Company
COMI Centre of Main Interest
Cl. Clause
Corpn. Corporation
Cr. Crore
edn. Edition
eds. Editor
Id. IBID
In re. In the matter of
IBC Insolvency and Bankruptcy Code
INR Indian Rupees
IP Insolvency Professional
IR Insolvency Resolution
IRDA Insolvency, Restructuring and Dissolution Act
IRP Insolvency Resolution Professional
GP General Partnership
Ltd. Limited
L. Rev. Law Review

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M/s Messer’s
Mag. Magazine
Manu. Manupatra.
NCLT National Company Law Tribunal
NCLAT National Company Law Appellate Tribunal
NPA Non-Performing Asset
SBI State Bank of India
SCA Singapore Companies Act
SCC Supreme Court Cases
U.S. United States
Trib. Tribunal
U.K. United Kingdom
u/s Under Section
w.e.f. With effect from
UNCITRL United Nations Commission on International
Trade Law

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LIST OF AUTHORITIES
S.No. List of case laws
1. Ashbury Ly. Carriage & Iron Co. v. Riche[1875] LR 7 HL
2. Attorney General v. Great Japanese Railway Co. 3 AC 473 (1880)
3. Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd 389 B.R.
325 (S.D.N.Y. 2008)
4. Deputy Commissioner of Income Tax vs General Electric Co.(2001) 71 TTJ Cal

973
5. Evans v. Brunner Mond. &Co. Ch 359 [1921],
6. In re Stanford Int'l Bank Ltd. 137 EWCA [Gr. Brit.:2010].
7. In re British American Ins. Co. Ltd., 425 B.R. 884, 908-09 (Banker. S.D. Fla.
2010)
8. In re Eurofood IFSC Ltd. 397 BCC (ECJ) (2006)
9. In re Millennium Global Emerging Credit Master Fund Limited, 458 B.R. 63, 77
(S.D.N.Y. 2011).
10 In Re Qimonda AG, 462 B.R. 165 Bankruptcy E.D. Va. 2011
11. In Re Videology Ltd, EWHC 2186 (Ch) [2018]
11. Iridium India Telecom Ltd. v. Motorola Inc. and others, Criminal Appeal No. 688
OF 2005
12. Re: Zetta Jet Pte Ltd &Or’s (Asia Aviation Holdings Pvt Ltd, intervener) 53 SGHC
[2019]
13. In Re Parmalat Hungary/Slovakia, Municipality Court of Fejer, 14 June 2004.
14. In re Philips, 139 P 3d. 639, 644 (Colo. 2008),

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15. In re Ti-Continental Exchange Ltd., 349 B.R. 627, 629 (Bankruptcy. E.D. Cal.
2006).
16. Lennard’s Company Ltd. v. Asiatic Petroleum Ltd AC 705 [1915]
17. Lee v. Lee Air Farming Ltd. [1960] 3 All ER 420 (PC)
18.
Mealeod & Co. Ltd. v. State of Orissa 1964 AIR 1284, 1964 SCR (4) 461
19. Radha Bari Tea Co. Pvt. Co. v. Mridul Kumar Bhattacharjee and others (153)
Comp case 579 (Gau) 2010
20. Rolled Steel Merchandise Ltd. v. British Steel Cor. Ch 246[1986],
21. Salomon v. Salomon. [1895-99] All ER (HL),
22. Sheffield Servs Co. thrown ridge, Kaycee Land Livestock v. Flahive, 46 P. 3d. 323
(WYO.2002)
23. State Bank of India vs. Jet Airways, 2019 SCC On Line NCLAT 1216 (2019)
24. Sunil Bharti Mittal v. CBI AIR 2015 SC 923
25. TN (Vietnam) &Another v. Secretary of State for Home Department and another,
Civil 2938EWCA [2018]
26. White and Anr v. South Derbyshire District Council, Pt SR 536[2013]
Articles,Journal and Reports
1. Ran Chakrabarti, Key Issues in Cross Border Insolvency,30 NLSIR 119 (2018)
2. Priya Mishra, Cross-border Corporate Insolvency Law in India: Dealing with Insolvency in
Multinational Group Companies Determining Jurisdiction for Group Insolvencies, 45(2)
VIKALPA 93 (2020)

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3. Bryan Rochelle, Cross Border Insolvency in U.S. and U.K: Conflicting Approaches to define
the Locus of a Debtor’s “Centre of Main Interest”, 50(2) IL 391, 2017
4. Report of Insolvency Law Committee on Cross Border Insolvency, Ministry of Corporate
Affairs, Government of India, 16th Oct 2018
5. Vasanth Rajasekaran and Harshvardhan Korada, Personal Guarantors To Corporate Debtors
Liable Under The Insolvency And Bankruptcy Code, 2016: Supreme Court Of India,
MONDAQ, 26 May 2021, https://www.mondaq.com/
6. OUTLOOK, Individual guarantors to face insolvency proceedings along with firms under IBC,
21 May 2021 8:16 pm, https://www.outlookindia.com/
7. Dhananjay Mahapatra, Guarantors for loans liable under IBC proceedings: SC, May 22, 2021,
08:22 IST,https://timesofindia.indiatimes.com/
8. Herman Jeremiah and Kia Jeng Koh, Timing Is Everything: Different Approaches To The
Relevant Date For Determining COMI In Cross-Border Recognition Proceedings, 15 August
2019, https://www.mondaq.com/
9. Mayer Brown, Overview of the English legal framework for cross border insolvency, Mayer
Brown International LLP, March 2012, https://www.mayerbrown.com/
10. Farshad Ghodoosi, The Concept of Public Policy in Law: Revisiting the Role of the Public
Policy Doctrine in the Enforcement of Private Legal Arrangements, 94 Neb. L. Rev. 685 (2015)
Available at: https://digitalcommons.unl.edu/nlr/vol94/iss3/5
STATUTES
1. UNCITRAL Model Law on Cross-Border Insolvency (1997)
2. British Cross Border Insolvency Regulations, 2006(ACT NO. 1030 of 2006)
3. Insolvency & Bankruptcy Code, 2016 (Act No. 31 of 2016)

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4. INSOLVENCY, RESTRUCTURING ANDDISSOLUTION ACT 2018 (ACT NO. 40OF
2018)
BOOKS
1. ISBN: 978-81-947537-0-4 Insolvency and Bankruptcy Board of India, Insolvency and
Bankruptcy Regime in India: A Narrative; Insolvency and Bankruptcy Board of India 2020
2. Taxman’s Company Law: A comprehensive text book, Dr. G. K. Kapoor & Dr. Sanjay
Dhamija, 22nd Edition, 2019
DATABASES
1. https://manupatra.com/
2. https://www.thehindubusinessline.com/
3. www.investopedia.com
4. https://www.jstor.org/
5. www.scconline.com

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STATEMENT OF JURISDICTION
The Hon’ble National Company Law Tribunal of Bengaluru, India has the jurisdiction under
Clause 12 of Report of Insolvency Law Committee on Cross Border Insolvency,2018 or
Insolvency and Bankruptcy Code Cross Border Draft Model Law of India based on the United
Nations Commission on International Trade Law (UNCITRAL) of Cross Border insolvency,
1997 which read as follows:
12. Application for recognition of foreign Proceedings
“Application for recognition of a foreign proceeding (1) Subject to clause 7, a foreign
representative may apply to the Adjudicating Authority for recognition of the foreign
proceeding in which the foreign representative has been appointed.
(2) An application for recognition under sub-clause (1) shall be accompanied by-(a) a certified
copy of the decision commencing the foreign proceeding and appointing the foreign
representative; (b) a certificate from the foreign court affirming the existence of the foreign
proceeding and of the appointment of the foreign representative; or(c) in the absence of
evidence referred to in sub-clause (a) and (b), any other evidence as may be prescribed,
affirming the existence of the foreign proceeding and of the appointment of the foreign
representative; and(d) a statement identifying all foreign proceedings and proceedings under
this Code in respect of the corporate debtor that are known to the foreign representative;
and(e) a translation of documents in support of the application for recognition in English, if
applicable.
(3) An application for recognition under sub-clause (1) shall be made in such form and manner
and be accompanied with such fees as may be prescribed.”
The applicant humbly submits to the jurisdiction of this Tribunal.

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STATEMENT OF FACTS
1. Fugistar Diamond India Private Limited was incorporated in Bengaluru in April 2005
by Vallabh Das born in Antwerp. He was the Managing Director and held 99% shares and
remaining was held by his two Indian friends. In 2010, the founder approached the Great Bank
of India for INR 1,000 crores loan, granting which bank created charge over his properties
worth INR 500 crores.
2. Founder, setup Fugistar Diamond Singapore General Partnership in January 2013 in
Singapore. The Indian company owned 99% stake, Vallabh and his Singapore resident friend
owned 1%. In January 2014, he approached the Singapore Central Bank for a loan of INR 500
crores. The GP had assets worth INR 250 crores in Singapore by the end of 2013. The Indian
company stood as a guarantor to disburse the loan amount of INR 500.
3. Both company and the GP acted well until end of 2016. Founder then started to
mismanage the firms and siphoned off money. The company did not pay interests for the whole
of 2017. In January 2019, he fled to Singapore and was awarded PRC in Singapore in January
2020. He started to manage the Indian company from Singapore and took complete charge of
the GP. Indian bank started to declare the loans of the Indian company as NPA and attached
all its movable and immovable assets in India. Amount due stood at INR 1,500 crores by the
end 2020. In April 2021, the Great Bank of India filed an application under section 7 of the
IBC before the NCLT at Bengaluru as IBC Application No. 100 of 2021. The application was
admitted on 20.10.2021 due to administrative delays. The moratorium period commenced from
21.10.2021. Further on, the Singapore bank also initiated insolvency proceeding, and
impleaded the Indian company. IR as per IRDA was appointed by the High Court of Singapore
and moratorium-like cooling off period was initiated. The GP filed Application No. 5 in IBC
Application No. 100/2021 before the NCLT Bengaluru. The application was filed under Clause
12 of the Model Draft Law.

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STATEMENT OF ISSUES
ISSUE -1
WHETHER APPLICATION BEFORE HON’BLE NATIONAL COMPANY LAW
TRIBUNAL ISSUSTAINABLE?
ISSUE- 2
WHETHER THE ‘CENTRE OF MAIN INETREST LIES IN INDIA?
ISSUE-3
WHETHER THE INSOLVENCY PROCEEDINGS CAN BE INITIATED AGAINST
THE GUARANTOR OF THE CORPORATE DEBTOR FOR THEIR LIABILITY?

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SUMMARY OF ARGUMENTS
1. WHETHER APPLICATION BEFORE HON’BLE NATIONAL COMPANY LAW
TRIBUNAL SUSTAINABLE?
It is most humbly submitted before this Hon’ble Tribunal that the proceedings that have been
started before this bench are not maintainable and sustainable. The suit brought forward is
opposed to public policy [1.1], is not a foreign main proceeding [1.2] and nor is it a foreign
non-main proceeding. [1.3]
2. WHETHER THE ‘CENTRE OF MAIN INTEREST’ LIES IN INDIA?
The Counsel humbly advocates that Centre of Main Interest for filing the insolvency process
lies in India.That the Company has been incorporated in India [2.1]. That The application for
insolvency was first filed by the Indian bank in India [2.2]. That The assets of the Indian
company located in India should be solely and exclusively be used only towards the dues of
the Indian bank and the assets of the Singapore GP [2.3].
3.WHETHER THE INSOLVENCY PROCEEDINGS CAN BE INITIATED AGAINST
The counsel from respondent side hereby submits that the insolvency proceeding cannot be
initiated against the corporate guarantor of the corporate debtor for the liability. A corporate
guarantee may be avoided on account of it being ultra vires the company i.e., beyond the
company's capacity [3.1]. Director of the Indian company is personally liable to the effect of
doctrine of alter ego [3.2]. The Singapore bank cannot be permitted to have any claims over
the assets located in India and Singapore [3.3].

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ARGUMENTS ADVANCED
1. WHETHER THE PROCEEDINGS BEFORE HON’BLE NCLT ARE
SUSTAINABLE AND MAINTAINABLE?
[¶1] It is most humbly submitted before this Hon’ble Tribunal that the proceedings that have
been started before this bench are not maintainable and sustainable. The suit brought forward
is opposed to public policy [1.1], is not a foreign main proceeding [1.2] and nor is it a foreign
non-main proceeding [1.3].
[1.1] That the proceedings are opposed to Public Policy of India.
[¶2] It is humbly contended that the proceedings are opposed to the public policy of India and
against the goodwill of the people of India.
[¶3] Under Article 6, the public policy exception has been explained as ‘Nothing in this Law
prevents the court from refusing to take an action governed by this Law if the action would be
manifestly contrary to the public policy of this State.’1 This has also been established under the
Section 4 of the Indian Draft law.
The doctrine of public policy is commonly invoked when a legal act is deemed to violate a
rudimentary public interest. The most common usage of the term “public policy” in the legal
community occurs when a contract, foreign judgment, arbitral award, or a foreign law is
claimed to violate the public policy of lex fori, meaning the tribunal’s seat. Courts often declare
such contracts or arbitral awards are “contrary to public policy.” “Doctrine of public policy” is
preferred for two reasons: (1) One of the most important instances where courts must struggle
to identify the trumping elements of public life on private legal acts, e.g., contracts, is when
1
Article 6, UNICITRAL Model Law

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courts apply the public policy exception. (2) The public policy exception cuts through various
fields of law at the national and international field2.
In case of Zetta Jet Pte Ltd3. Court held that the standard for interpreting public policy grounds
is much lower than in jurisdiction that have adopted the word manifestly in their public policy
exemption. In case of In Re Qimonda AG4, the US Bankruptcy court held that the public policy
exemption is limited to the most fundamental policies and purposes of the US. Similarly in
India, Bank is the primary institution for growth of the Country. If bank will lose its asset, then
it will lead to degrade of the economy of the state. Finally, people can suffer loss so, it is against
the public policy.
[¶4] In the present case the Applicant are demanding control of all assets of the Indian Company
and Further the Indian bank not recovering the sum from the Indian company will lead to a
greater loss for the Indian public at large and may even lead to its downfall economy. Thus,
this proceeding of the Singapore bank filed in India is opposed to the public benefit in India.
Hence, the proceedings are opposed to Public Policy of India.
[1.2] That the current proceedings are not Foreign Main Proceedings.
[¶5] It is humbly contended that the current proceedings are not foreign main proceedings as
understood in the international community.
[¶6] Foreign main proceeding means a foreign proceeding taking place in the state or country
where the debtor has the centre of its main interests5. Foreign proceedings will be recognised
2
Farshad Ghodoosi, The Concept of Public Policy in Law: Revisiting the Role of the Public Policy Doctrine in the
Enforcement of Private Legal Arrangements, 94 Neb. L. Rev. 685 (2015)
3
Zetta Jet Pte Ltd., [2018] SGHC 16
4
In Re Qimonda AG, 462 B.R. 165 Bankruptcy E.D. Va. 2011
5
Article 2 (b), UNICITRAL Model Law; also, Section 2 (e), Indian Draft Law

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as main proceedings if the domestic courts determine that the debtor has its Centre of Main
Interest’ in a foreign country.6
[¶7] In the present case the debtor i.e. the directors and its entities have main interest in India
because (a) the Indian Company registered in India (b) the registered place of business has not
moved to another country three months prior just the director has taken the PRC in Singapore
(c) the central of main administration takes place in India that location is ascertainable to third
parties. Thus, Central of Main Interest of Vallabh and its entities is in India.
Further, Singapore GP are also liable to be treated as the assets of the Indian company as the
same was held only through a general partnership firm which does not have independent legal
status and is a flow through entity for all purposes. A flow-through (pass-through) entity is a
legal business entity that passes all its income on to the owners or investors of the business.
Here, the Indian company is the investors and owner both. As the location and place of business
of Owner and investor’s location in India. So, the main interest of business is in India.
Hence, this current proceeding of Singapore High Court is not Foreign Main Proceedings.
[1.3] That this is not a Foreign Non-Main Proceeding
[¶8] Under Article 2(c), Foreign non-main proceeding means a foreign proceeding, other than
a foreign main proceeding, taking place in a State where the debtor has an establishment within
the meaning of subparagraph (f) of this article.
[¶9] For non-main proceedings, it must be proved that the debtor has an establishment in the
said country. The relief provided in such cases is at the discretion of the domestic court 7. “An
‘establishment’ is defined as ‘any place of operations where the debtor carries out a non-
6
ISBN: 978-81-947537-0-4 Insolvency and Bankruptcy Board of India, Insolvency and Bankruptcy Regime in
India: A Narrative; Pg. No. 350 Insolvency and Bankruptcy Board of India 2020
7
Ibid

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transitory economic activity with human means and assets or services. In layman’s terms, an
establishment is a place of business.”8
[¶10] In Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd9 the
American Supreme Court when examining what constitutes a foreign non-main proceeding
according to section 150 (5) of Chapter 15 based on the criteria of an establishment, the court
noted that the debtors did not conduct any non-transitory economic activity in the Cayman
Islands, nor did they have any funds on deposit there before the Cayman Islands insolvency
proceedings commenced. Here it was seen that where the debtor had had any institution in
Cayman Islands or not.
[¶11] In the similar manner it has to be established that the debtor in the Singapore suit is the
Singapore GP. What needs to be taken into consideration here that the Singapore GP does not
have any institution or business in India.
[¶12] The Indian Firm is a separate legal entity and is not an establishment of the Singapore
GP that is controlled and managed by the Singapore GP. The Singapore GP does not conduct
any business through the Indian Firm. Thus, the Indian firm is not an establishment of the
Singapore GP. Thus, as the Indian firm is not an establishment of the Singapore GP thus this
proceeding also does not qualify as a foreign non-main proceeding either.
2. WHETHER ‘THE CENTRE OF MAIN INTREST’ LIES IN INDIA?
[¶13] The Counsel humbly advocates that Centre of Main Interest for filing the insolvency
process lies in India. As per the principle of Centre of Main Interest it is helpful in deciding
8
Mayer Brown, Overview of the English legal framework for cross border insolvency, Mayer Brown International
LLP, PG No. 03 March 2012, https://www.mayerbrown.com/
9
Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd 389 B.R. 325 (S.D.N.Y. 2008)

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where the main proceeding should be commenced. It broadly implies that it is seat of a
corporate entity’s major stakes, whether that is in terms of control or the location of its assets
and its significant operation.10COMI is a notion related to the corporate debtor’s linkage, that
is, to find out the corporate debtor’s locus of prime interests in terms of operations, assets and
management11.
[¶14] Courts in the U.S. and U.K. have taken different approaches to defining COMI: (1) the
"nerve center" (or "principal place of business") test- and (2) the "objective third party"
analysis.12 The UNCITRAL Guide to Enactment provides the following two principal factors
which may indicate COMI in most cases13:
(a) where the central administration of the debtor takes place; and
(b) which is readily ascertainable by creditors.
If this test is implemented then it would be clear that the Centre of Main Interest lies in India.
[2.1] That the Company has been incorporated in India.
[¶15] The counsel humbly advocates that company for which insolvency is filed was registered
under the Company Act, 1956 in April 2005 in Bengaluru14. The headquarter and the nerve
center of the Fugistar Diamond is India as in Singapore General Partnership Indian company
was the main shareholder.
10
Rani Chakrabarti, Key Issues in Cross Border Insolvency,30 NLSIR 119, 124 (2018)
11
Priya Mishra, Cross-border Corporate Insolvency Law in India: Dealing with Insolvency in Multinational Group
Companies Determining Jurisdiction for Group Insolvencies, 45(2) VIKALPA 93, 97 (2020)
12
In re Stanford Int'l Bank Ltd. 137 EWCA [Gr. Brit.:2010].
13
Report of Insolvency Law Committee on Cross Border Insolvency, Ministry of Corporate Affairs, Government
of India, 16th Oct 2018
14
Paragraph No. 01 of case data

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[¶16]Jet Airways15is an ideal case to take up. When the company faced financial distress, the
creditors in the Netherlands moved to the Dutch court for initiating insolvency proceedings.
A month later, State Bank of India also approached National Company Law Tribunal for
initiating insolvency process against Jet Airways. On being apprised of the Dutch insolvency
proceedings, the NCLT, instead of initiating cooperation, asked the Insolvency Professional to
ignore the proceedings in the Netherlands. It is only through the intervention of the Appellate
Tribunal (India) that the representative of the Committee of Creditors was advised to seek
cooperation from the Dutch Court, which after intense deliberations, resulted in a Cross-border
Insolvency Protocol. This protocol went in the right direction, recognizing India as the COMI
since the company was Indian with main assets situated in India16.
[¶17]In the U.S., one COMI definition stems from the familiar notion of "principal place of
business"-a term that some courts have equated to "center of main interests."17 The
headquarters and the directors are the brain of the company. The meeting place of the directors
of the company can be the other office of the company from where the financial decision of
the company is taken.
[¶18]In re Ti-Continental Exchange Ltd.18, the court used the "principal place of business" test
to determine that the COMI of certain debtor insurance companies. The court reached this
conclusion even though the debtors had engaged in the vast majority of their fraudulent
activities in the U.S. and Canada. More important for the court were other factors, including
15
State Bank of India vs. Jet Airways, SCC OnLine NCLAT 1216 (2019)
16
Priya Mishra, Cross-border Corporate Insolvency Law in India: Dealing with Insolvency in Multinational Group
Companies Determining Jurisdiction for Group Insolvencies, 45(2) VIKALPA 93, 97 (2020)
17
In re British American Ins. Co. Ltd., 425 B.R. 884, 908-09 (Bankruptcy. S.D. Fla. 2010)
18
In re Ti-Continental Exchange Ltd., 349 B.R. 627, 629 (Bankruptcy. E.D. Cal. 2006).

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the debtors' organization as international business companies in St. Vincent and the
Grenadines, where they conducted regular business operations at their registered offices in
Kingstown, St. Vincent. These facts, the court found, suggested that the debtor-insurer's
"principal place of business" was one and the same as its COMI.
[¶19]In Re Parmalat Hungary/Slovakia19 the issue before the court of Hungary was regarding
a subsidiary company that was established in Slovakia, but its parent company was founded in
Hungary. The court decided to adjudicate on the matter because it found that the decisions in
the subsidiary company were managed and controlled by the Hungarian parent company.
[2.2] That The application for insolvency was first filed by the Indian bank in India
[¶20] The counsel humbly submitted that the application for insolvency was first filed by the
Indian bank in India and the delay on account of appointment of the Members cannot be saddled
upon the Indian bank as its application was liable to be automatically admitted and hence it
ought to be deemed to have been admitted within 14 days of filing its application in April 2021
itself which makes the Indian proceeding as the First and Main Proceeding.
[¶21] In Re: Zetta Jet Pte Ltd &Or’s.20, there were two issues to be addressed in relation to the
determination of Zetta Jet Singapore’s COMI: (1) the date at which such assessment was to be
made, and the appropriate approach in assessing what constitutes the COMI of a particular
debtor company. In reaching its view that the US approach should be adopted (i.e. the relevant
date is the date of filing of the recognition application), the Singapore High Court observed
that this provides greater certainty and accords with commercial realities and the language of
the provisions of the Singapore Model Law determine the debtor company’s COMI, the starting
position is the presumption under Article 16(3) of the Singapore Model Law viz. that the debtor
19
In Re Parmalat Hungary/Slovakia, Municipality Court of Fejer, 14 June 2004.
20
Re: Zetta Jet Pte Ltd &Or’s (Asia Aviation Holdings Pvt Ltd, intervener)53 SGHC [2019]

21
company’s registered office is its COMI. This presumption does not constitute a rebuttable
presumption that must be disproved on the balance of probabilities but rather, one that may be
displaced by the place of the debtor company’s central administration and other factors which
point the COMI away from the place of registration to some other location.
[¶22]In Re Videology Ltd21 , on a recognition application under the Cross-Border Insolvency
Regulations (which implement the Model Law in the UK), the court held that COMI for
recognition purposes was indeed determined by reference to the date when the request to open
the insolvency proceedings the subject of the recognition application is first made.
[2.3] That The assets of the Indian company located in India should be solely and
exclusively be used only towards the dues of the Indian bank and the assets of the
Singapore GP
[¶23] It is humbly argued by the counsel from respondent that the assets of the Indian company
located in India should be solely and exclusively be used only towards the dues of the Indian
bank and the assets of the Singapore GP are also liable to be treated as the assets of the Indian
company as the same was held only through a general partnership firm which does not have
independent legal status and is a flow through entity for all purposes. The dues of the Indian
bank are bigger in proportion compared to the dues of the Singapore bank based on the overall
dues of the Indian company and the Singapore GP.
[¶24] Counsel relies on the case In re Millennium Global Emerging Credit Master Fund
Limited22, the court recognized a foreign main proceeding, holding that the debtor's COMI was
Bermuda-although some factors pointed toward other locales. The court noted that two of the
21
In Re Videology Ltd, EWHC 2186 (Ch) [2018],
22
In re Millennium Global Emerging Credit Master Fund Limited, 458 B.R. 63 (S.D.N.Y. 2011).

22
debtors three directors were located in Bermuda.23 These directors had the right to replace all
of the debtors' other agents, and to determine whether to place the funds into an insolvency
proceeding. Moreover, the funds' bank, creditors and auditors also resided there. Thus, without
management, investors, creditors, or property in Bermuda, the court found that the debtors'
COMI was Bermuda.24
[¶25] The European Court of Justice's decision in In re Eurofood IFSC Ltd25serves as the
principal authority through which U.K. courts have subsequently applied the third-party test to
cases invoking the CBIR26. The European Court of Justice held that COMI "must be identified
by reference to criteria that are both objective and ascertainable by third parties," and that
"objectivity and that possibility of ascertainment by third parties are necessary in order to
ensure legal certainty and foreseeability concerning the determination of the court with
jurisdiction to open main insolvency proceedings."
[¶26]As Mr. Vallabh setup his company in India and all its business process were held from
India before the Mr. Vallabh escape India. So, India be considered as the Centre of Main
Interest in India.
3. WHETHER THE INSOLVENCY PROCEEDINGS CAN BE INITIATED AGAINST
[¶27] The counsel from respondent side hereby submits that the insolvency proceeding cannot
be initiated against the corporate guarantor of the corporate debtor for the liability. A corporate
guarantee may be avoided on account of it being ultra vires the company i.e., beyond the
23
Millennium, 458 B.R. at 77.
24
. Ibid.
25
In re Eurofood IFSC Ltd. 397 BCC (ECJ) (2006)
26
BritishCross Border Insolvency Regulations, 2006.

23
company's capacity[3.1]. Director of the Indian company is personally liable to the effect of
doctrine of alter ego [3.2]. The Singapore bank cannot be permitted to have any claims over
the assets located in India and Singapore [3.3].
[3.1] That a corporate guarantee may be avoided on account of it being ultra vires the
company beyond the company’s capacity
[¶28] It is submitting before Hon’ble NCLT that a corporate guarantee may be avoided on
account of it being ultra vires the company i.e., beyond the company's capacity. In addition,
the Companies Act prohibits a company from giving a guarantee for the only benefit of a
director of the company or a related business entity; or for the benefit of a business entity that
is connected to the directors of the company giving the guarantee27.
[¶29] Here in this instant case, the Vallabh is the head and brain of the company. He formed
the general partnership business in Singapore and made the Indian Company as its partner only
to get benefit himself. Therefore, it is against the principle of the doctrine of Ultra Vires28.
[¶30] Further, the doctrine of ultra vires is fundamental principal of the company law in any
country. Its objects of the company can be departed only to the extent permitted to company
law. Hence, company enters any contract beyond the power conferred of the company act will
be void. It was stated in case of Ashbury Ly. Carriage & Iron Co. v. Riche29, the court held that
any act which is ultra vires to the company law shall be wholly void and not binding, and the
whole body of shareholders cannot ratify such acts by passing a resolution in the meeting.
27
Rolled Steel Merchandise Ltd. v. British Steel Cor. Ch 246[1986],
Radha Bari Tea Co. Pvt. Co. v. Mridul Kumar Bhattacharjee and others (153) Comp case 579 (Gau) 2010
28
Taxman’s Company Law, Dr. Sanjay Dhamija, Lesson 5, PG. No. 99-100
29
Ashbury Ly. Carriage & Iron Co. v. RicheLR 7 HL [1875],
Evans v. Brunner Mond. &Co. Ch 359 [1921],
Attorney General v. Great Japanese Railway Co. 3 AC 473 (1880)

24
[¶31] It is submitted that the director of the company formed the GP in Singapore. He entered
the loan agreement with the Singapore bank and made the Indian company as a debtor and
Guarantor both which is not within the power of the director. In every contract of guarantee,
there is always normal tripartite arrangement in which suretyship exists as between principal
debtor and surety and as between surety and creditor; but here surety and principal debtor are
the same person. The director of the Indian Company who makes this arrangement to take
benefit and fraud. So, the company is not liable as a guarantor or even as a debtor to the
Singapore GP because Director has made that transaction which is against the company
objects30. We rely upon the famous Indian case laws Laxman Swami Mudaliar v. LIC31,
Hon’ble Court held that power must be exercised to promote the company’ object and there
must be a proximate connection between the act and company’s business interest32.
Hence, the corporate guarantee is avoided on account of ultra vires act of company.
[3.2] That director of the Indian Company is personally liable to the effect of doctrine of
Alter Ego.
[¶32] The counsel humbly submits that director entered in the loan agreement for financing the
Singapore to benefit himself. He has not only defaulted in Singapore but also in India and two
different countries. So, that he shall be held personally liable for his actions when he acted
fraudulently or unjust. We rely upon the doctrine of alter ego principle in which tribunal must
ignore the status of the shareholders, officers and directors of the company to their liabilities
in their respective capacity33.
30
White and Another v. South Derbyshire District Council, Pt SR 536[2013]
31
Laxman Swami Mudaliar v. LICAIR 1963 SC 1185
32
TN (Vietnam) &Another v. Secretary of State for Home Department and another,Civil 2938EWCA [2018]
33
In re Philips, 139 P 3d. 639, 644 (Colo. 2008),

25
[¶33] Further, counsel hereby submits the case of Lennard’s Company Ltd. v. Asiatic Petroleum
Ltd34., Hon’ble Court held that it expanded the decision given in Salomon v. Salomon35. The
House of Lords held that the liability could be imposed on the corporation for the acts of the
directors are controlling mind of the company. The company has no mind of its own any more
than director has the mind of its own36. Its actions and directions will must consequently seek
in the person of somebody who for the purpose called as agents.
[¶34] Therefore, Indian Company cannot be liable for the defaulted amounts. Indian company
is a seek company in India. It is under the process of the insolvency resolution and all assets of
the company will be released to fulfil all the liabilities of the company37.
[¶35] Lastly, Indian company is not liable of any default amounts at Singapore. As the effect
of the doctrine of alter ego the director Vallabh must be held liable for his unjust act. He must
be personally liable as a partner of the Singapore GP.
Hence, Director of the Indian company is personally liable to the effect of doctrine of alter ego.
[3.3]. That the Singapore bank cannot be permitted have any claim over assets located
in India and Singapore
[¶36] It is humbly submitted before Hon’ble NCLT that the assets of the Indian company
located in India should be solely and exclusively be used only towards the dues of the Indian
bank and the assets of the Singapore GP are also liable to be treated as the assets of the Indian
company as the same was held only through a general partnership firm which does not have
independent legal status and is a flow through entity for all purposes. A flow-through (pass-
34
Lennard’s Company Ltd. v. Asiatic Petroleum LtdAC 705 [1915]
35
Salomon v. SalomonAll ER (HL) [1895-99],
Lee v. Lee Air Farming Ltd. 3 All ER 420 (PC) [1960]
36
Sunil Bharti Mittal v. CBI AIR 2015 SC 923,
Sheffield Servs Co. thrown ridge, Kaycee Land Livestock v. Flahive, 46 P. 3d. 323 (WYO.2002)
37
Tesco Supermarket Ltd. v. Natrass[1971] UKHL 1, [1972] AC 153,
Standard Chartered Bank and Others v. Directorate of Enforcement and others Civil Appeal No. 1748 of 1999,
Iridium India Telecom Ltd. v. Motorola Inc. and others, Criminal Appeal No. 688 OF 2005

26
through) entity is a legal business entity that passes all its income on to the owners or investors
of the business. Here, the Indian company is the investors and owner both. Therefore, the assets
of the Singapore GP belong to Indian Company and on the process of the liquidation process
of the company. The assets of Singapore GP and Indian company will recoup to fulfil the
liability of the Indian secure creditors first.
[¶37] Further, the Indian company has been incorporated in India as per Indian Company laws.
It has domiciled in India. The director Vallabh was the promoter of the company was residing
in India at the time when the business transaction was going on. So, the place of business is at
India. We rely on the case Mealeod & Co. Ltd. v. State of Orissa38,Domicile The place of
registration is like-wise the domicile of a company, and this domicile clings to it throughout its
existence. It is, however, possible that by operation of the law of the Company's domicile,
another system of law may be substituted for the law of the place of registration. Domicile,
residence, place of management or any other criterion of a similar nature39".
[¶38] In case of Jet Airways40, The Hon’ble NCLAT adhered the universalist approach to
delivered the judgement of this case because Tribunal stipulates the administration of the
insolvency proceedings by one court in the jurisdiction where the entity is registered or
domiciled by taking into account all the assets of such corporate debtor regardless of the
location in the world. The counsel relies upon the judgement of the Hon’ble Tribunal and the
registered office of the company belongs to India41. As the centre of main interest of the
38
Mealeod & Co. Ltd. v. State of Orissa (4) SCR 461 (1964)
39
ibid
40
State Bank of India vs. Jet Airways, 2019 SCC OnLine NCLAT 1216 (2019)
41
PINSENTMASONS, Indian precedent case for Cross-Border Insolvencies,
https://www.pinsentmasons.com/out-law/analysis/indian-precedent-case-for-cross-boder-insolvencies, 6th Aug
2021

27
company in India therefore, the foreign main proceeding is in India42In the case of Re. Zetta43,
the Singapore High Court recognized proceedings of Zetta entities pending in the United States
as foreign main proceedings because the registered office of the company in USA and the assets
in USA is more compare to Singapore.
[¶39] As the Indian Company insolvency case is main proceeding and Concurrent proceeding
has been commenced by the Singapore Court. The counsel submits that as per Art.28 of the
Model Draft law, the effects of that proceeding shall be restricted to the assets of the debtor
that are located in Singapore and, to the extent necessary to implement cooperation and
coordination under Article 25, 26 and 27, to other assets of the debtor that, under the law of
this State, should be administered in that proceeding. Further, the assets of the Singapore GP
belong to Indian Company also44.Lastly, Counsel submits that the dues of the Indian bank are
bigger in proportion compared to the dues of the Singapore bank based on the overall dues of
the Indian company and the Singapore GP.
Hence, The Singapore bank cannot be permitted to have any claims over the assets located in
India and Singapore.
42
Art. 2, Foreign main proceeding” means a foreign proceeding taking place in the State where the debtor has the
centre of its main interests.
43
Re: Zetta Jet Pte Ltd &Or’s (Asia Aviation Holdings Pvt Ltd, intervener)53 SGHC [2019]
44
Art. 28, 29, 30, chapter VI of Draft Model Law

28
PRAYER
Wherefore in the light of the issue raised, arguments advanced and authorities cited, it is
humbly prayed that this Hon’ble Tribunal may be pleased to adjudge and declare that:
1. The application filed by the Singapore Interim Receiver is not maintainable. The
proceeding in Singapore cannot even be treated as Foreign Non-Main Proceeding and,
therefore, far less as Foreign Main Proceeding.
2. The assets of the Indian company should be solely and exclusively be used only towards
the dues of the Indian bank and the assets of the Singapore GP are also liable to be
treated as the assets of the Indian company.
3. The Centre of Main Interest (COMI) of the Indian company is in India
4. The proceedings initiated by the Indian bank be permitted to continue as per the order
of the Adjudicating Authority dated 20.10.2021 and that the entire control and
management of the assets of the Indian company located in India and Singapore be
granted to the Indian IRP
5. The Singapore bank not be permitted to have any claims over the assets located in India
and Singapore
6. If any assets are left after settling the dues to the Indian bank, then it may be dealt with
in accordance with the Singapore IRDA provisions for the Singapore bank’s claims.
AND PASS ANYOTHER ORDER, DIRECTION THAT THIS HON’BLE TRIBUNAL
MAY DEEM FIT IN THE INETREST OF JUSTICE, EQUITY AND GOOD
CONSCIENCE.
ALL OF WHICH IS HUMBLY PRAYED
COUNSEL FOR THE RESPONDENT

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1

19thSurana & Surana National Corporate Law Moot

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

Application No. 5/ 2021

IBC Application No. 100/ 2021

Fugistar Diamond India Private Limited

APPLICATION FILED UNDER CLAUSE 12 OF INSOLVENCY AND

WRITTEN SUBMISSIONS ON BEHALF OF THE

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

LIST OF ABBREVIATIONS……………………….…………………….…………. …..4-5

LIST OF AUTHORTIES…………………………….………….……………………...... 6-9

STATEMENT OF JURISDICTION………………………………………………. …. ….10

STATEMENT OF ISSUES …………………………………………………..................... 12

SUMMARY OF ARGUMENTS…………………….…………………………….…... …13

1. WHETHER APPLICATION BEFORE HON’BLE NATIONAL COMPANY LAW

TRIBUNAL SUSTAINABLE? ……………………………………………………….14-17

[1.1] THAT THE SUIT BROUGHT FORWARD IS OPPOSED TO PUBLIC

[1.2] THAT IT IS NOT A FOREIGN MAIN PROCEEDING ………………………….15-16

[1.3] THAT IT IS NOT A FOREIGN NON-MAIN PROCEEDING…………………....16-17

2.WHETHER THE CENTRE OF MAIN INTREST’ LIES IN INDIA?

[2.1] THAT THE COMPANY HAS BEEN INCORPORATED IN INDIA….…….…...17-18

3.WHETHER THE INSOLVENCY PROCEEDINGS CAN BE INITIATED AGAINST

THE GUARANTOR OF THE CORPORATE DEBTOR FOR THEIR

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

[3.1] THAT A CORPORATE GUARANTEE MAY BE AVOIDED ON ACCOUNT OF IT

BEING ULTRA VIRES THE COMPANY I.E., BEYOND THE COMPANY'S

[3.2] THAT DIRECTOR OF THE INDIAN COMPANY IS PERSONALLY LIABLE TO

THE EFFECT OF DOCTRINE OF ALTER EGO…………….………………....……….24-25

[3.3] THAT THE SINGAPORE BANK CANNOT BE PERMITTED TO HAVE ANY

CLAIMS OVER THE ASSETS LOCATED IN INDIA AND SINGAPORE…………...25-27

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

A.I.R. All India Reporter

COMI Centre of Main Interest

In re. In the matter of

IBC Insolvency and Bankruptcy Code

INR Indian Rupees

IRDA Insolvency, Restructuring and Dissolution Act

IRP Insolvency Resolution Professional

L. Rev. Law Review

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

NCLT National Company Law Tribunal

NCLAT National Company Law Appellate Tribunal

NPA Non-Performing Asset

SBI State Bank of India

SCA Singapore Companies Act

SCC Supreme Court Cases

U.S. United States

U.K. United Kingdom

u/s Under Section

w.e.f. With effect from

UNCITRL United Nations Commission on International

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

1. Ashbury Ly. Carriage & Iron Co. v. Riche[1875] LR 7 HL

2. Attorney General v. Great Japanese Railway Co. 3 AC 473 (1880)

325 (S.D.N.Y. 2008)

4. Deputy Commissioner of Income Tax vs General Electric Co.(2001) 71 TTJ Cal

6. In re Stanford Int'l Bank Ltd. 137 EWCA [Gr. Brit.:2010].

8. In re Eurofood IFSC Ltd. 397 BCC (ECJ) (2006)

10 In Re Qimonda AG, 462 B.R. 165 Bankruptcy E.D. Va. 2011

11. In Re Videology Ltd, EWHC 2186 (Ch) [2018]

13. In Re Parmalat Hungary/Slovakia, Municipality Court of Fejer, 14 June 2004.

14. In re Philips, 139 P 3d. 639, 644 (Colo. 2008),

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT