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Lawyers

Gujarat High Court Slams Judges for Yielding to Lawyer Intimidation

Strategic Insights

— 1 min read

The Gujarat high court has rejected two cases of recusal by National Company Law Tribunal (NCLT) judges in Ahmedabad, citing intimidation from lawyers as a key factor. The court's judgment highlights the risks of "browbeating, forum shopping, and attempts to influence the bench" when judges yield to pressure. This ruling comes in the context of a high-stakes corporate dispute between ArcelorMittal Nippon Steel India Ltd (AM/NS) and creditors of Essar Steel India Ltd.

Key Takeaways:

  • The Gujarat high court quashed two recusals by NCLT judges in Ahmedabad, citing undue pressure from lawyers as the primary reason.
  • The NCLT judges allegedly recused themselves from the case due to intimidation from lawyers representing the creditors.
  • The NCLT president in New Delhi issued two transfer orders, shifting the case to Mumbai, which the high court ruled was not authorized.
  • The high court directed the NCLT Ahmedabad to resume hearing the case virtually if needed.
  • Justice Niral Mehta emphasized that judges and members are bound by oath to decide impartially, without fear or favor, affection or ill will.
  • The outcome may set a precedent for similar cases where judges are pressured to recuse themselves.
  • The judgment implies that the NCLT president's authority is limited to administrative orders, and they cannot transfer cases across states arbitrarily.
  • AM/NS accused the creditors and their counsel of "browbeating the bench" and "forum shopping".

Statistics:

  • The case involved ArcelorMittal Nippon Steel India Ltd (AM/NS) and creditors of Essar Steel India Ltd.
  • The resolution plan for Essar Steel India Ltd was approved in 2019.
  • The two NCLT benches in Ahmedabad recused themselves in January (Ahmedabad-1) and April (Ahmedabad-2) 2024.
  • The NCLT president in New Delhi issued two transfer orders to send the case to Mumbai.
  • The case is now set to be heard virtually by NCLT Ahmedabad.

Sources:

  • Gujarat high court judgment (no date provided)
  • Business Standard (Jan 10, 2024, no date provided)
  • The Economic Times (April 23, 2024, no date provided)
  • Press Trust of India (Jan 7, 2024, no date provided)
  • Times of India (Apr 22, 2024, no date provided)

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