Cross-Border Insolvency

Raghavi.N, B.A.LL.B.(Hons.), The Tamilnadu Dr Ambedkar Law University, School of Excellence in Law, Tharamani, Chennai

ABSTRACT:

A cross-border insolvency law modelled after the UNCITRAL Model Law on CrossBorder Insolvency 1997 (the "Model Law") is presently being discussed and potentially passed by India. The Indian cross-border bankruptcy framework will offer a way for international insolvency processes to be acknowledged in India. It is crucial to determine whether there is still a separate foundation for acknowledging and supporting cross- border insolvency procedures in India in addition to the Model Law, even though it is only a matter of time until India adopts it. For the following reasons, this is essential: First off, the Model Law does not state that it is the exclusive avenue for foreign creditors to file claims under national law. The drafters of the Model Law wanted it to serve as an extra gateway to those offered by local laws, as demonstrated by Article 7. Additionally, Article 5 of Draft Part Z of the Insolvency and Bankruptcy Code 2016 does not specifically deviate from this premise in the proposed Indian law.Second, assistance and cooperation in relation to such a cross-border insolvency proceeding may only be based on the inherent common law jurisdiction, if available, in cases where neither the "Centre of Main Interests" nor the establishment of a corporate debtor is situated in India. Third, the criterion for reciprocity will serve as the foundation for the cross-border insolvency system in India. As a result, nations that do not meet this condition may find it advantageous if there is an independent basis for recognition in India. This article argues that under the common law rules regulating cross-border insolvency, foreign agents should be encouraged to investigate the prospect of seeking aid from the commercial courts in India, and that the Indian courts should be receptive to this possibility.

Keywords: IBC- Indian Bankruptcy Code, MCA- Ministry of Corporate Affairs, ILC- Insolvency Law Reports, UNCITRAL- United Nations Commission on International Trade Law, MLCBI-Model Law on cross- border insolvency, CBIRC- Cross-Border Insolvency Rules/Regulation Committee, IBBI- Insolvency and Bankruptcy Board of India, CA- Companies Act, 2013, CD-Corporate Debtor, COMI- Centre of Main Interests, AA- Adjudicating Authority, NCLT- National Company Law Tribunal, NCLAT- National Company Law Appellate Tribunal, FSP-Financial Service Provider, NBFC- Non-Banking Financial Companies, JIN- Judicial Insolvency Network, IP- Insolvency Professionals, LLP- Limited Liability Partnership, S. or Sec- Section