Comparative Analysis With Global Insolvency Frameworks
- IJLLR Journal
- Mar 27
- 2 min read
Lakshay Mehta, Amity University, Noida
INTRODUCTION
India’s Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) was introduced in 2016 as part of the government’s effort to streamline corporate insolvency resolution, reducing delays and improving transparency. The code aims to balance the rights of creditors and debtors while ensuring the survival of distressed businesses wherever possible. The CIRP is a structured framework designed to maximize the value of distressed companies, with a primary focus on creditor recovery. However, while it has undoubtedly improved the insolvency process, certain challenges still persist in comparison to more established models such as the U.S. Chapter 11 bankruptcy proceedings and the U.K. Insolvency Act 1986.1 In the U.S., Chapter 11 Bankruptcy has long been regarded as a leading model for corporate insolvency resolution, particularly due to its flexibility in allowing businesses to restructure while maintaining operations. Similarly, the U.K. Insolvency Act 1986 is known for its emphasis on business rescue and preserving the going-concern value of companies facing financial distress. India’s CIRP shares similarities with both models, but it also has distinct characteristics that make it unique.2
This chapter will provide an in-depth comparison of India’s CIRP, U.S. Chapter 11, and the U.K. Insolvency Act 1986, with a particular focus on the framework of each system, the role of creditors, management control, timelines, and judicial involvement. It will examine how these models deal with key issues such as creditor rights, business rescue, liquidation, cross- border insolvency, and the overall impact of each system on distressed companies. Through this comparative analysis, we will better understand the strengths and weaknesses of India’s CIRP and draw lessons that can potentially help in refining its insolvency resolution framework.
