From Aspiration To Operation: Tracing The Structural Failure Of Section 234 And 235 And The Promise Of The 2026 Amendment
Divyaansh Kharbanda, OP Jindal University
ABSTRACT
India’s Insolvency and Bankruptcy Code, 2016 marked a transformative shift in domestic insolvency resolution. Yet its cross-border provisions (Section 234 and 235) remained operationally dormant for nearly a decade. Existing scholarship attributes this failure to legislative inadequacy and non -adoption of the UNCITRAL Model Law on Cross-Border Insolvency,1997. This paper aims to present an alternative understanding to the underutilization of Section 234 and 235, by tracing it within a deeper sovereign-protective policy temperament. Analyzed from India’s international economic engagement in this period, most sharply in its 2016 model Bilateral Investment Treaty, which similarly demanded reciprocity as a condition of cooperation and resisted automatic deference to foreign legal systems, making international adjudication operationally impracticable, this paper argues that the bilateral agreement requirement of Section 234 was not a drafting oversight but a structural choice. Through this lens, the paper traces how judicial improvisation in Jet Airways and Videocon exposed the cost of this legislative dormancy and evaluates the concept of modified universalism as India’s emerging jurisprudential response to the absence of statutory guidance. It then assesses the Insolvency and Bankruptcy Code (Amendment) Act, 2026, examining whether its cross-border provisions represent a genuine philosophical departure from India’s territorialist instinct or merely a procedural recalibration that leaves the deeper structural resistance intact. Further the paper aims to identify reforms that remain necessary for India’s cross-border regime to match the ambition of its domestic framework.
