The Supreme Court on Friday paved the way for ArcelorMittal — the world’s largest steel maker — to come to India after handing down a verdict that upheld the validity of its Rs 42,201 crore offer for Essar Steel under the bankruptcy resolution process.

Essar Steel’s large financial creditors that included the State Bank of India recovered almost 90 per cent of their admitted debt claims — making it one of most successful cases under the Insolvency and Bankruptcy Code (IBC).

The apex court’s verdict put an end to a hard-fought legal tussle over the prized asset — an 8 million tonne gas-fired steel plant based on India’s west coast at Hazira, Gujarat — that ran for 835 days. The IBC process sets a 330-day timeline for resolution.

ArcelorMittal, which is headed by Lakshmi Niwas Mittal, said it was ‘very pleased with the judgment’ and plans to ‘close the acquisition soon’.

It will now be a strong player in the domestic market, competing with Tata Steel, JSW Steel, and Steel Authority of India Ltd.

The Ruia family, the erstwhile promoters of Essar Steel, who fought a bitter battle to stymie a new owner from acquiring the company, also welcomed the judgment.

“We wish ArcelorMittal and Nippon Steel (Arcelor’s partner in the bid) the very best on their entry into the Indian market. They are acquiring a world-class facility in a market that has a long runway for growth,” an Essar spokesperson said.

The verdict will restore faith in the IBC resolution process and end the climate of despair that had gripped financial creditors as they saw the bidders squabble over the legitimacy of bids and the resolution process .

The deal, however, comes at a time the steel market has started to turn bearish. Two years ago, when ArcelorMittal had agreed to pay top dollar for the Essar Steel assets, the market had just moved into an up cycle.

The total consideration for the company would be close to Rs 49,000 crore as it had to pay off Rs 7,000 crore debt at two companies — Uttam Galva Steel and KSS Petron — where they were listed as promoters, which had initially made them ineligible to bid under the IBC code.

India’s three-year old bankruptcy resolution process, which replaced a system plagued by years of delay, got a new lease of life with Friday’s order.

The three-member bench, headed by Justice Rohinton F. Nariman, restored financial creditor’s supremacy over operational creditor in the insolvency process.

It also said that the decision of the committee of creditors (CoC) on payout terms under the resolution plan will be final.

The judgment said that NCLT or the appellate body cannot alter the resolution plan, as NCLAT had tried to do with ArcelorMittal’s offer. They have to send it back to CoC for reconsideration.

“The power of judicial review is restricted to seeing whether CoC has ensured maximisation of value of assets and has maintained the corporate debtor as a going concern,” N.G. Khaitan, senior partner of Khaitan & Co, said.

The court, however, permitted an extension of the 330-day deadline for resolution under the IBC process “in exceptional circumstances”.