US-based fund DVI invokes force majeure clause in Amtek's debt resolution

While a force majeure clause is common in commercial contracts, in an IBC case, the committee of creditors (CoC) generally doesn't agree to including such a clause in the resolution plan

In a rare instance in the Insolvency and Bankruptcy Code (IBC) regime, US-based investment fund Deccan Value Investors (DVI) has triggered the force majeure clause in Amtek Auto debt resolution case, citing deteriorating performance of the corporate debtor in the wake of the Covid-19 pandemic.

DVI confirmed this, stating it had submitted its resolution plan for Amtek Auto in January, in good faith and with a detailed strategy to revive Amtek’s fortunes.

“In March, Covid-19 triggered an immediate and accelerating deterioration in industrial activity across the economy. The impact was severe on the auto sector and Amtek’s financial position worsened