Cross-Border Insolvency Under The Insolvency And Bankruptcy Code: Need For Reform
- IJLLR Journal
- 20 hours ago
- 2 min read
Shreypuri, B.B.A., LL.B. (Hons.), Bharati Vidyapeeth University, New Delhi
ABSTRACT
The globalisation of trade and capital has produced a class of insolvencies whose assets, creditors and operations straddle several jurisdictions, yet the Insolvency and Bankruptcy Code, 2016 was principally conceived as a domestic, territorial statute. Its only original engagement with the transnational dimension lay in Sections 234 and 235, which permit the Central Government to conclude bilateral reciprocal agreements and empower the adjudicating authority to issue letters of request to foreign courts. This paper argues that the bilateral-treaty model has proved structurally inadequate: no reciprocal agreement has ever been concluded, the provisions have remained effectively dormant, and Indian tribunals have been left to improvise. The insolvency of Jet Airways (India) Limited, in which the National Company Law Appellate Tribunal sanctioned an ad hoc cooperation protocol between the Indian resolution professional and the Dutch trustee, exposed both the ingenuity and the fragility of judicial workarounds in the absence of a statutory framework. Drawing on the theoretical shift from strict territorialism towards modified universalism, the paper evaluates the UNCITRAL Model Law on Cross-Border Insolvency, 1997—now adopted in some sixty jurisdictions—and its pillars of access, recognition, relief and cooperation, together with the pivotal doctrine of the centre of main interests. It traces the domestic reform trajectory from the Insolvency Law Committee’s draft Part Z of 2018 through successive parliamentary committee recommendations, culminating in the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, which was passed by both Houses of Parliament in early 2026. The paper contends that although the amendment marks a decisive break from the treaty model, its reliance on a bare enabling provision that delegates the entire framework to executive rule-making raises serious concerns of excessive delegation and legal uncertainty. It concludes that genuine reform demands substantive codification of the Model Law’s core principles within the Code itself, reinforced by specialised benches and institutional capacity, if India’s cross- border regime is to command international confidence.
Keywords: Cross-Border Insolvency; UNCITRAL Model Law; Insolvency and Bankruptcy Code, 2016; Sections 234 and 235; Centre of Main Interests; Modified Universalism.
