Cross-Border Insolvency: The Need For A Comprehensive Indian Framework
- IJLLR Journal
- May 17
- 2 min read
Amna Ansari, United University, Prayagraj, Uttar Pradesh, India
ABSTRACT
The intensification of global trade and the proliferation of multinational enterprises have rendered cross-border insolvency a critical concern for sovereign states and international investors alike. India, despite enacting the landmark Insolvency and Bankruptcy Code, 2016 (hereinafter referred as IBC), continues to rely on a fragmented and largely inoperative legal architecture for addressing insolvencies with transnational dimensions. This research paper undertakes a comprehensive examination of existing cross- border insolvency framework of India, centering its analysis on the dormant sections 234 and 235 of the IBC. It juxtaposes this domestic reality against the UNCITRAL Model Law on Cross-Border Insolvency, 1997, which has been adopted by over sixty jurisdictions. Through detailed case studies, most notably State Bank of India vs. Jet Airways (India) Ltd. and the Singapore High Court’s recognition of an Indian insolvency in Re Compuage Infocom Ltd., this research paper illuminates the legal uncertainty, procedural chaos, and economic costs engendered by the legislative vacuum. The paper further evaluates the reforms proposed under the IBC (Amendment) Bill, 2025, and then the 2026 Amendment Act, arguing that while they represent a foundational step, their delegation of substantive rule-making to the executive branch risks perpetuating delays. The paper concludes by proposing a clear roadmap for India to adopt a modified version of the UNCITRAL Model Law, addressing public policy concerns, judicial capacity, and the unique challenges posed by group insolvency and digital assets, thereby positioning India as a credible and predictable jurisdiction in the global financial architecture.
Keywords: Cross-border insolvency, UNCITRAL Model Law, Insolvency and Bankruptcy Code 2016, Sections 234 and 235, Jet Airways, Compuage Infocom, modified universalism, COMI, public policy exception.
