Cross-Border Insolvency: Harmonization, Jurisdictional Approaches And Creditor Protection
- IJLLR Journal
- 2 days ago
- 1 min read
C. Maruthapandi, Assistant Professor, Department of Business Law, School of Excellence in Law, The Tamil Nadu Dr. Ambedkar Law University, Chennai, Tamil Nadu, India
Dr. R. Kumudha, Assistant Professor (SG), Government Law College, Coimbatore, Tamil Nadu, India
ABSTRACT
Cross-border insolvency presents significant challenges arising from differences in national insolvency laws, jurisdictional rules, creditor priorities, and mechanisms for recognizing and coordinating foreign proceedings. This article undertakes a comparative legal analysis of the approaches adopted by the European Union, United States, United Kingdom, and India, with particular emphasis on the principles of Centre of Main Interests (COMI), automatic stay, distribution of assets, forum shopping, and comity in the recognition of foreign insolvency proceedings. The study finds that the EU provides a relatively integrated framework based on mutual recognition, while the United States and United Kingdom combine statutory mechanisms with judicial cooperation and principles of international comity. India, by contrast, continues to face significant uncertainty because Sections 234 and 235 of the Insolvency and Bankruptcy Code, 2016 do not provide a comprehensive framework for cross-border insolvency in the absence of reciprocal arrangements. The comparative analysis demonstrates that fragmented procedures may result in parallel proceedings, inconsistent treatment of creditors, asset dissipation, and increased costs. The article therefore recommends that India adopt a comprehensive cross-border insolvency framework based on the UNCITRAL Model Law, with clear rules on COMI, recognition, relief, cooperation, and coordination of concurrent proceedings, while incorporating appropriate safeguards for domestic creditors and public policy.
Keywords: Cross-Border Insolvency, Centre of Main Interests (COMI), UNCITRAL Model Law, International Comity and Insolvency and Bankruptcy Code, 2016.
