Abstract
The developing insolvency regime in India with the foundation of the Insolvency and Bankruptcy Code (IBC), 2016, has had an enormous impact on the domestic corporate rescue and liquidation procedures. Nonetheless, it is still in the developmental stage of its cross-border insolvency (CBI) strategy. As the economy becomes increasingly globalized, corporate entities are often subject to a situation of complicated insolvency, complete with foreign creditors, assets and proceedings. The paper is a critical analysis of the current legal provisions on CBI in India, particularly of Section 234 and 235 of the IBC which are based on bilateral agreements and letters of request, thereby restricting its practical application. With this background, this paper evaluates the proposed adoption of the UNCITRAL Model Law (UML) on CBI in India and how the proposed adoption will assist in aligning the domestic law with the global best practices. It also investigates the trend of the judiciary in its interpretation and the loopholes that are still present. Among the key challenges identified in the study include institutional coordination, jurisdiction and lack of a full statutory framework. This paper posits that India needs to implement more organized and internationally oriented insolvency regime to make the system efficient, predictable and to make investors confident. It ends with the suggestions of the legislative reform pointing to the necessity of the formal inclusion of the Model Law (ML) and enhancement of the mechanisms of cooperation across the borders.
Keywords: Corporate Insolvency Resolution Process, Cross-border Insolvency, Insolvency and Bankruptcy Code 2016, International Insolvency Law, UNCITRAL Model Law.