HC permits UBHL to seek more time in arbitration matter

The High Court of Karnataka on Thursday permitted United Breweries (Holdings) Ltd (UBHL) to get consent from the official liquidator for extension of time for pronouncement of award in a separate arbitration matter involving the embattled company.

Counsel for UBHL placed before the court a letter addressed to Justice S P Bharucha, the former Chief Justice of India who is the arbitrator in arbitration proceedings between UBHL and others and Zuari Fertilizers and Chemicals and others.

UBHL sought the court’s permission for extension of time to pronounce the award in arbitration for six months from February 18, 2017.  UBHL filed an Original Side Appeal against the ruling by a single judge to wind up the company for its inability to pay loans to international companies and a consortium of banks. UBHL argued that it had no obligation to repay the loans as it was only the principal guarantor.

The lenders filed a case against UBHL seeking their dues from the now-defunct Kingfisher Airlines. UBHL had given corporate guarantees for loans to run Kingfisher, which caused the collapse of Vijay Mallya’s liquor business. Mallya owns 52.34% in UBHL.

A division bench of Chief Justice S K Mukherjee and Justice P S Dinesh Kumar gave the permission and adjourned the hearing until April 25.

Land acquisition
The High Court of Karnataka said the state government can no longer exercise power under the KIAD Act 1966 to acquire land for industrial use without conforming to the prerequisites prescribed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act 2013 (RFCTLARR).

Justice Anand Byareddy pronounced the order on a batch of petitions challenging the land acquisition proceedings under KIAD Act though RFCTLARR Act had came into effect from January 2014.

“The state government can no longer exercise power under Section 3 of the KIAD Act without conforming to the prerequisites as prescribed under the 2013 Act,” the court said. The court also said Section 3(1) and Section 28 of the KIAD Act, which empower the state to declare any plot as an industrial area and acquire land, are repugnant to the provisions of the RFCTLARR Act.  The bench said the scheme under the KIAD Act is “inconsistent” with the provisions of the RFCTLARR Act.