A disagreement between Ascend Capital Services Pvt. Ltd. and Laxmi Foils Pvt. Ltd. has led to the appointment of a neutral third party by the Delhi High Court to help settle the issue. Let's break down the key points of this case.
In February 2022, Ascend Capital lent money to Laxmi Foils for their business needs. This was made official in an Agreement on February 21, 2022. However, Laxmi Foils allegedly failed to pay back a main amount of Rs. 24,69,134, leading to formal warnings from Ascend in July 2022.
Ascend, along with previous owners, filed a request under the Insolvency and Bankruptcy Code in 2023. However, the National Company Law Tribunal (NCLT) turned it down on July 5, 2023, because there were already disputes and they questioned if the debt was real.
"Applicants have failed to prove the existence of any debt that is clear or exists beyond any doubt." — NCLT Order
Ascend tried to start arbitration in February 2025, but Laxmi Foils argued against it, saying the part of the agreement about arbitration was never finalized. They claimed it was just a draft for discussion.
Justice Harish Vaidyanathan Shankar of the Delhi High Court looked into the case and decided to appoint a neutral third party. Even though there were disagreements about the agreement's validity, the court found enough reason to move forward with arbitration.
"This Court’s scrutiny is limited to examining the basic existence of an arbitration agreement." — Justice Harish Vaidyanathan Shankar
Mr. Harshit Agarwal, a lawyer, has been appointed as the neutral third party to resolve the dispute. Both parties are to split the costs equally, and all issues will be addressed by this person.
The court has decided to proceed with arbitration, appointing Mr. Harshit Agarwal to help both parties find a resolution. The focus now is on resolving the issues through this process.
For more details, refer to the court's decision dated February 17, 2026.
