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jeremyhodge2 · 3 years

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The Rise of the New Sunni Elite in Iraq: The Case of Fallujah

London School of Economics: 16 November 2020

By Anand Gopal and Jeremy Hodge

In August 2019, Iraqi Federal Police showed up at the mayor’s office in Fallujah to expel ʿAissa al-Sayir, the mayor, who had long been a key player in the city’s politics. Citing voting irregularities, the Anbar Governorate deployed the police after Sayir refused to give up his post. The event attracted little notice in the international press, but within Iraq many observers believed that the ultimate mover in this drama was not the local government at all, but Muhammad al-Halbusi, the Speaker of the Iraqi parliament, and one of the wealthiest businessmen in Anbar. The removal of Fallujah’s mayor represented a changing of the guard in Sunni politics, as a new elite seeks to assert itself in the post-ISIS era.

The discussion of ISIS in Iraq often focuses on Sunni-Shia divides, but this tends to ignore the crucial role of intra-Sunni dynamics in preserving the peace. In post-ISIS Iraq, the Sunni elite have split, with one segment allying itself to Baghdad and reaping enormous benefits – for itself and for cities like Fallujah – while the other segment has found itself excluded from patronage. Those, like Halbusi, who prove willing to bridge confessional divides are the winners in this new Iraq, while the old Sunni elite who cling to pre-war alignments are the losers. Understanding this divide is crucial to ensuring a lasting political settlement.

The New Elite: The Rise of Muhammad al-Halbusi

Muhammad al-Halbusi is one of the most powerful Sunnis in the country, but he derives this status not from a grassroots base but rather by virtue of his alliance with the Fatah parliamentary bloc, which is led by figures linked to the powerful Iran-backed Badr Brigade. Hailing from the town of Garma in Fallujah’s northeastern outskirts, al-Halbusi belongs to the Halbus clan. Pre-2003, the Halbus was far less influential than Fallujah’s other tribes, and exerted little influence on the Baʿathist state. The clan also had few ties to the Iraqi Muslim Brotherhood, which in the late Saddam years was an important actor in Fallujah. After 2003, marginalised clans like the Halbus did not make up an important part of the mainstream anti-U.S. resistance; instead, it was jihadi groups like al-Qaʿeda in Iraq that recruited heavily from the ranks of the Halbus and similar lower-status clans.

In this environment, Muhammad al-Halbusi, who had a degree in engineering, distinguished himself from the majority of his compatriots by working openly with the Americans as early as 2003 on renovation and reconstruction projects. In June 2004, al-Halbusi’s firm, Steel Company Ltd., was one of many Iraqi companies sub-contracted to work on a $28.6 million water treatment facility in Fallujah. The project soon stalled due to the deteriorating security situation and contractor negligence; by 2005, FluorAMEC, the American firm leading the project, estimated that it would cost $51.3 million to complete the project. By 2011, this had risen to $107.8 million. By this point, Muhammad al-Halbusi had become a major player in Fallujah. Three years later, he was elected to represent the city in parliament.

The Old Elite: The Decline of ʿAissa al-Sayir

The political trajectory of Aissa al-Sayir, the ousted Fallujah mayor, was the mirror opposite of Halbusi’s. Understanding his rise and fall requires exploring the complex relationship between the Baʿth regime and Islamist movements before 2003. During the 1970s and 1980s, Saddam Hussein’s government carried out extensive repression of the Iraqi Muslim Brotherhood, sentencing many to death. However, by the 1990s the Iraqi president’s stance towards the group began to shift, especially as the regime looked to promote an alternative Islamist vision that could compete with, and be more easily managed than, Saudi-linked Salafism. In 1991, dozens of Brotherhood leaders saw their sentences commuted, and were eventually released. In Fallujah and elsewhere in Anbar, Brotherhood figures such as Abd al-Razaq al-Saʿadi and Makki Hussein al-Kubaysi, who had been operating covertly, began to proselytise in the open, often in conjunction with the Baʿth party’s Faith Campaign. (Al-Kubaysi was an associate of Baʿthist Faith Campaigner Subhei Samara’i, promoting pro-Ba’athist variant of Brotherhood thinking; ʿAbd al-Razaq al-Saʿadi meanwhile, brother of Brotherhood leader ʿAbd al-Malik al-Saʿadi, was close with ʿAbd al-Latif al-Humaym, another pro-Baʿathist cleric who was among the richest families in Anbar.) Many of these figures became key leaders in the post-2003 insurgency; Makki al-Kubaysi, for example, became one of the founders of the Association of Muslim Scholars, a body that funnelled funds to Brotherhood-linked insurgent groups such as the 1920 Revolutionaries Brigades and the Islamic Army of Iraq.

One of the leaders who emerged from this milieu was ʿAissa al-Sayir. Having graduated with the rank of Lieutenant from Iraq’s Police Academy in 1993, al-Sayir had solid Baʿthist credentials. At the same time, his tribe, the Albu ʿAissa, had contributed more members to the ranks of Fallujah’s Muslim Brotherhood than any other tribe. After 2003, ʿAissa himself became a high-ranking member of the Brotherhood’s political front, the Iraqi Islamic Party (IIP). Many prominent IIP-affiliated figures who dominated Sunni politics after 2003, such as Rafa al-ʿAissawi and Khamis Khanjar, were similarly Albu ʿAissa tribesmen from Fallujah. Following the US invasion, IIP chapters throughout Anbar seized control of city councils, police departments, and the Anbar provincial council, liaising with the Americans while simultaneously funding the 1920’s Revolutionary Brigades, the Islamic Army of Iraq, and other insurgent groups.

In 2007, the IIP in Fallujah formed a new armed faction, Hamas Iraq, which joined the US-backed Sahwa – ‘Awakening’ – movement against al-Qaʿeda. Al-Sayir, who was officially serving as an ‘aide’ to the police chief, moonlighted as the commander of Hamas Iraq. Hamas Iraq is widely believed to have exploited the cover provided by the Sahwa to lead a campaign of arrests and executions against the IIP’s political enemies. For a brief period in 2011 and 2012, al-Sayir spent time in jail following a government crackdown on the IIP and other Sunni politicians such as Rafi al-ʿAissawi and former Iraqi Vice President Tariq al-Hashemi.

However, following the re-emergence of al-Qa’eda in Iraq as ISIS in 2013, a rapprochement occurred between the IIP and the Iraqi government, which sought an Islamist ally to thwart the appeal of ISIS among Sunnis. In provincial elections that April, the IIP catapulted back to power throughout Anbar, regaining influence over the governorship, provincial council, and numerous other bodies. In 2015, al-Sayir was appointed mayor of Fallujah.

The Birth of a New Era

Though the rise of ISIS proved useful for the IIP, it paid far greater dividends for the Popular Mobilisation Forces (PMF), a massive umbrella body comprised of mostly Shiʿa militias that operated in partnership with – but not under the purview of – regular Iraqi army forces. Even the PMF’s critics acknowledged its indispensable role in defeating ISIS, a legacy that granted the group political capital during the May 2018 parliamentary elections. The factions closest to Iran united as the Fatah Alliance. Muhammad al-Halbusi was by now a rival of the IIP, who sought to monopolise resource distribution and exclude those outside their patronage network, especially with an independent power base like al-Halbusi. So he took the unusual step of throwing his lot in with Fatah, a pro-Iran party. The gamble paid off, as Halbusi was elected Iraq’s Speaker of Parliament, despite the fact that his party, Al-Hal Alliance, had won few votes.

‘We supported Muhammad al-Halbusi to become speaker of Iraq’s parliament,’ said Hadi al-Ameri, Chairman of the Fatah Alliance and the Badr Brigades. ‘He’s a man of his word.’ Throughout 2020, Fatah MPs have publicly defended al-Halbusi from attempts by IIP-affiliated officials to submit a vote of no-confidence and have him impeached. Al-Halbusi’s Al-Hal Alliance used such support to supplant the IIP as the new power broker in Anbar province. It has also benefited from independent revenue streams, such as that of Jamal al-Karbuli, a wealthy Sunni businessman from Masyab, a mixed-sect city in southern Iraq where the Badr Brigades maintain a strong presence. Both the Governor of Anbar that ordered ʿAissa al-Sayir’s removal, ʿAli Farhan al-Dulayimi, and al-Sayir’s replacement, Muwayyed Farhan al-Dulaymi, are members of the Al-Hal Alliance and owe their status to deals made by al-Halbusi in parliament.

Since al-Halbusi’s appointment, Fallujah has witnessed a massive reconstruction boom. Hundreds of new residential units have popped up. Officials are paving the city’s main thoroughfares, rebuilding the important al-Muwazafin bridge, and are working on the city’s water treatment facility. (This latter project is being paid for with a $285 million loan from the Japanese International Cooperation Agency in 2015.)

The rivalry between al-Halbusi and the IIP in Fallujah, rooted in old socio-economic cleavages, is now oriented around seeking to benefit from such lucrative contracts. Shortly before his dismissal, ʿAissa al-Sayir was rumoured to have met with Khamis Khanjar, a fellow Albu ʿAissa tribesman with historical links to the IIP and who, like al-Halbusi, has used his riches to influence national politics, making the two bitter enemies. Khanjar’s own party, ‘the Arab Project,’ includes in its ranks IIP figures such as Rafa al-ʿAissawi and Tariq al-Hashimi, targets of the government’s crackdown on Sunni politicians in 2011–12. Prior to his removal, opponents accused al-Sayir of stalling reconstruction projects in Fallujah in order to ensure that the city’s IIP elite won the contracts. However, since al-Sayir’s departure, al-Halbusi has become something of a ‘city boss’ in Fallujah, with companies linked to him and his Al-Hal Alliance monopolising funds pouring into the city.

Social media gives a sense of the reach of al-Halbusi’s patronage network. Fallujah’s mayor, for example, recently tweeted using the hashtag #Fallujah_in_the_eyes_of_Halbusi’s_men a video of two supporters standing on the city’s renovated main thoroughfare, praising their benefactor:

Rebuilding Fallujah has brought tremendous benefits for the city. That such efforts are linked to a political force rooted in a cross-sect alliance is a cause for optimism. Al-Halbusi himself has promoted his alliance with Fatah using just such a narrative, declaring that following after the horrors of ISIS, Iraqis are ready to move past confessional divides.

Yet in allying with the Badr Brigades and in marginalising the old Sunni elite, Halbusi and the new elite risk stoking resentment in Anbar – potentially creating fault lines that ISIS-like groups can exploit in the future. The mass graves dotting the surroundings of Fallujah, left behind by Iran-backed militias, remain unaccounted for. (Recently, for example, al-Halbusi refused to point fingers at the militias when a few dozen bodies turned up in al-Babil governorate, where many Sunnis had been abducted and killed). Tens of thousands who have lost their family members due to these militias remain without justice, or a truth and reconciliation process. Through such partnerships, Halbusi has added to the sense in Fallujah that these militias are able to operate with impunity. Meanwhile, the IIP continues to exert an influence. Its members proliferate the ranks of Anbar’s Sunni middle class, and occupy many bureaucratic posts in local government and in key industries. The best hope for a stable Iraq is a lasting political settlement, which will depend on the country’s resources – in terms of reconstruction funds and access to justice – being shared equitably across its society.

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loyallogic · 6 years

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Time Period for Corporate Insolvency Resolution Process under IBC – An analysis

In this article, Samanna Gaffoor, pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata analyses the time period for CIRP under IBC

Introduction

The Insolvency and Bankruptcy Code, 2016 (the “Code”) was finally given the presidential assent on 28th May 2016 and few of the provisions of the Act came into force in August 2016. The Act came at a time when the banks in India were facing a huge backlash due to non performing assets(NPA).

The main objective of this enactment is to provide a time bound and cost effective solution to insolvency and bankruptcy of corporates, individuals and firms thereby protecting the interest of all stakeholders and promoting entrepreneurship and ease of doing business. It has also proved beneficial to banks with a stressed account to recover at least the principal portion from the defaulting borrowers, as is evident from the acquisition of debt-ridden Bhushan steel by TATA steel. The bankrupt firm was among the 12 stressed assets that the RBI had referred to the NCLT proceedings last year. By virtue of the Insolvency and Bankruptcy Code, the lenders of the bankrupt firm were able to recover the principal amount. This was hailed as a historic breakthrough in resolving legacy issues in banks.

Corporate Insolvency Resolution Process

The IBC provides insolvency and bankruptcy solution to both corporate debtors and individuals/firms. Corporate Insolvency resolution process (CIRP) is the process of resolution of insolvency of a corporate debtor as provided under this code. Part II of the Insolvency and Bankruptcy Code, 2016 deals with insolvency resolution and liquidation for corporate persons. Corporate debtor means a corporate person who owes a debt to any person. Corporate debtor includes a company, a limited liability partnership firm or any other person incorporated with Limited Liability under any law, but does not include a financial service provider

Definition of Corporate Debtor

Section 3(7) of the Insolvency and Bankruptcy Code, 2016 defines a Corporate person to mean

‘a company as defined in clause (20) of section 2 of Companies Act ,2013 (18 of 2013), a Limited liability partnership ,as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act,2008 (6 0f 2009) or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider.’

Procedure involved in Corporate Insolvency under the code

The procedure for insolvency resolution of a corporate debtor is dealt in Chapter II to part II of the code.

Where any corporate debtor commits default, financial creditor, an operational creditor or the corporate debtor itself may initiate the Corporate Insolvency Resolution process.

The Adjudicating Authority (AA) will declare a moratorium. The adjudicating Authority for the insolvency of a Corporate Debtor is the National Company Law Tribunal

The AA will appoint an Interim Resolution Professional.

Immediately after the appointment of the Interim Resolution Professional, the AA will cause a public announcement of the initiation of the resolution process of the corporate debtor and also will call for submission of claims by the creditors.

The affairs of the Corporate Debtor against whom the insolvency procedure is initiated shall be managed by the Interim Resolution Professional from the date of his appointment. He has to manage the operations of a corporate debtor as a going concern and strive to protect and preserve the property of the corporate debtor.

The Interim professional shall constitute the committee of creditors on the basis of the claims submitted during the Public Announcement.

The Committee of Creditors on their first meeting has to appoint a Resolution professional. In most of the cases, the interim profession itself shall be the resolution professional. The committee of creditors has to make an application to the AA who in turn shall forward the same to the Insolvency and Bankruptcy Board of India.

The resolution professional shall prepare an Information Memorandum to enable the resolution applicant to prepare a resolution plan as a solution for resolving the insolvency of the corporate Debtor.

The Adjudicating authority may approve /reject the resolution plan which is approved by the committee of creditors

The resolution plan is approved if it fulfils the requirements as provided in subsection 2 of Section 30 of the Insolvency and Bankruptcy Code,2016.

In case the resolution plan is rejected, the AA will initiate Liquidation process which is dealt in Chapter III of the Insolvency and Bankruptcy code, 2016.

Time limit for completion of Corporate Insolvency Resolution Process

Section 12 of the Insolvency and Bankruptcy Code, 2016

(1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process.

(2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of seventy-five per cent. of the voting shares.

(3) On receipt of an application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days:

Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once

As per the code, the procedure involved in the Corporate Insolvency Resolution Procedure should be completed within 180 days or within the extended period of 90 days. In short, the resolution procedure should be completed within 270 days, failing which the Adjudicating Authority will initiate Liquidation procedure under Chapter III of the Code.

The request for extending the Corporate resolution process beyond 180 days shall be made by the resolution professional on passing of a resolution by at least 75% of the voting shares of the Committee of creditors. The resolution professional will file an application with the Adjudicating Authority who if satisfied that the corporate insolvency resolution process cannot be completed within the period of 180 days, may extend the time period but the same shall not exceed 90 days.

Time period of 180 days – Mandatory or not?

If the Resolution professional fails to submit the resolution plan within 180 days or within the extended period of 90 days the Adjudicating Authority may initiate Liquidation procedure. Once the liquidation procedure is initiated the Company will be wound up and the steps will be taken for distribution of proceeds to creditors as per the provisions of the code. It will also result in the discharge of the officers, workmen and employees of the Corporate Debtor.

The Supreme Court gave a significant judgement under the insolvency and Bankruptcy Code, 2016 in M/s Surendra Trading Co. v. JK Jute Mills Co. Ltd (here) wherein it was held that ‘Time is the essence of Insolvency and Bankruptcy code’.It was observed by the supreme court that non-completion of the [proceedings within the stipulated time given under section 12 of the Code will result in liquidation proceedings under section 33 of the said act

In view of the above provisions of the Code, it can be said that the resolution procedure has to be completed within 180 days. It is mandatory and only on a approval from the adjudicating Authority can the time period be extended upto 90 days.

Merits and Demerits of shorter periods for completion of insolvency procedures

Merits

The lower time limit will help in achieving the goal of ease of business and providing a quick and viable solution to commercially unviable corporates.

It will also help in garnering more financial support to corporates as the creditors will have an assurance of recovery of their debts.

One of the serious bottleneck in the Sick Industrial Companies( Special Provisions) Act,1985 was the long time period of an average of 4 years for completion of the insolvency procedure.

The stakeholders had to wait for quite long to recover their dues from the sick companies

The long drawn procedures spread over long period entails a cost to the creditors as well as to the corporate debtor who has become commercially unviable.

A shorter period will help in finding a better feasible solution for reviving the corporate debtor which is on the brink of financial collapse.

Demerits

The very limited deadline may ultimately force Company into liquidation without serving the main objective of the revival of the financial health of the corporate debtor.

Conclusion

In the United States and United Kingdom Bankruptcy procedure, the time period for completion of the insolvency procedure is one year and one and half years respectively. The Insolvency and bankruptcy code has almost provided the time limit in tune with the international standards

The Insolvency and Bankruptcy code in India is however used as a tool for recovering the loans rather than as revival and rehabilitation tool. This mindset should change for the overall development of the economy and divert the resources of the sick company to a more viable and feasible organisation.

The post Time Period for Corporate Insolvency Resolution Process under IBC – An analysis appeared first on iPleaders.

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juudgeblog · 6 years

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Time Period for Corporate Insolvency Resolution Process under IBC – An analysis

In this article, Samanna Gaffoor, pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata analyses the time period for CIRP under IBC

Introduction

Corporate Insolvency Resolution Process

Definition of Corporate Debtor

Section 3(7) of the Insolvency and Bankruptcy Code, 2016 defines a Corporate person to mean

Procedure involved in Corporate Insolvency under the code

The procedure for insolvency resolution of a corporate debtor is dealt in Chapter II to part II of the code.

Where any corporate debtor commits default, financial creditor, an operational creditor or the corporate debtor itself may initiate the Corporate Insolvency Resolution process.

The Adjudicating Authority (AA) will declare a moratorium. The adjudicating Authority for the insolvency of a Corporate Debtor is the National Company Law Tribunal

The AA will appoint an Interim Resolution Professional.

The Interim professional shall constitute the committee of creditors on the basis of the claims submitted during the Public Announcement.

The resolution professional shall prepare an Information Memorandum to enable the resolution applicant to prepare a resolution plan as a solution for resolving the insolvency of the corporate Debtor.

The Adjudicating authority may approve /reject the resolution plan which is approved by the committee of creditors

The resolution plan is approved if it fulfils the requirements as provided in subsection 2 of Section 30 of the Insolvency and Bankruptcy Code,2016.

In case the resolution plan is rejected, the AA will initiate Liquidation process which is dealt in Chapter III of the Insolvency and Bankruptcy code, 2016.

Time limit for completion of Corporate Insolvency Resolution Process

Section 12 of the Insolvency and Bankruptcy Code, 2016

Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once

Time period of 180 days – Mandatory or not?

Merits and Demerits of shorter periods for completion of insolvency procedures

Merits

The lower time limit will help in achieving the goal of ease of business and providing a quick and viable solution to commercially unviable corporates.

It will also help in garnering more financial support to corporates as the creditors will have an assurance of recovery of their debts.

One of the serious bottleneck in the Sick Industrial Companies( Special Provisions) Act,1985 was the long time period of an average of 4 years for completion of the insolvency procedure.

The stakeholders had to wait for quite long to recover their dues from the sick companies

The long drawn procedures spread over long period entails a cost to the creditors as well as to the corporate debtor who has become commercially unviable.

A shorter period will help in finding a better feasible solution for reviving the corporate debtor which is on the brink of financial collapse.

Demerits

The very limited deadline may ultimately force Company into liquidation without serving the main objective of the revival of the financial health of the corporate debtor.

Conclusion

The post Time Period for Corporate Insolvency Resolution Process under IBC – An analysis appeared first on iPleaders.

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