A Critical Analysis Of The Legislative Gaps And Judicialtrends In India’s Cross-Border Insolvency Regime
- IJLLR Journal
- 1 hour ago
- 2 min read
V R Kalyani, School of Law, VELS University of Science, Technology and Advanced Studies
Ms. T Nikithashree, Assistant Professor, School of Law, VELS University of Science, Technology and Advanced Studies
ABSTRACT
In an increasingly globalized economy, the insolvency of multinational corporations presents complex legal challenges that transcend national borders. While the Insolvency and Bankruptcy Code, 2016 (IBC) has fundamentally reformed India's domestic insolvency regime, its framework for addressing cross-border insolvency remains a critical legislative gap. This article critically analyzes the procedural and substantive hurdles arising from the non-enactment of Part Z of the Code, which is based on the UNCITRAL Model Law on Cross- Border Insolvency. In its absence, Indian courts and insolvency professionals are compelled to navigate complex issues through an ad-hoc mechanism, primarily relying on the limited scope of Sections 234 and 235 and the principle of judicial comity.
Employing a doctrinal and comparative methodology, this paper examines the efficacy of this judicially- driven approach. It delves into complex cross-border issues such as the recognition of foreign proceedings, cooperation between courts, asset tracing across jurisdictions, and the enforcement of foreign judgments, using the landmark case of Jet Airways (India) Ltd. as a central case study. The analysis reveals that the current framework, while demonstrating judicial pragmatism, fosters legal uncertainty, encourages fragmented parallel proceedings, and risks the erosion of asset value. It argues that ad-hoc protocols, though innovative, are an unsustainable substitute for a robust, predictable statutory regime. Ultimately, the article concludes that the immediate notification of Part Z is imperative for aligning India with international best practices. Adopting the UNCITRAL Model Law framework would provide the necessary legal certainty, enhance cooperation with foreign jurisdictions, and solidify the IBC’s objective of maximizing value for all stakeholders, thereby boosting investor confidence in the Indian economy.
Keywords: UNCITRAL Model on cross border insolvency, International co- operation, foreign proceedings recognition, Insolvency Bankruptcy Code 2016.
