Legal Harmonisation Of International Insolvency Law
- IJLLR Journal
- Jan 19
- 2 min read
Dr. K. Nidhi Mohan, PhD from NLU, Delhi
ABSTRACT
Cross border insolvency is a facet of insolvency law whose importance has grown in recent times. The number and complexity of cross border insolvency cases has shown a substantial increase due to growth of international trade and commerce. Domestic insolvency laws of nations often neglect to provide for cases of insolvencies with multifarious economic linkages across jurisdictions. Also, the domestic insolvency laws are not a monolith. They provide conflicting rules on various aspects of insolvency proceedings e.g., recognition of foreign proceedings, order of priority of claimants, reliefs due to various stakeholders etc. These variations across domestic insolvency legislations make cross border insolvency resolution difficult, time consuming and complicated.
harmonisation of cross border insolvency legal framework is recognised as an important goals of international insolvency law. Since this diversity of national insolvency laws proves to be a hurdle to restructuring efforts and insolvency resolution of cross-border businesses, Law on Cross Border Insolvency 1997 is one such vehicle of harmonisation worldwide. In the Indian context Insolvency Law Committee in 2018 and The UNCITRAL Model which has found international acceptance having been adopted in 58 nations Cross Border Insolvency Rules Regulations Committee in 2021 have recommended that the India adopt this model law as Draft Part Z of the
Insolvency and Bankruptcy Code 2016.
This paper will analyse the UNCITRAL model Law as a force for legal harmonisation of cross border insolvency laws. In doing so the author will study the Draft Part Z as sought to be adopted in India. These divergences and similarities between UNCITRAL Model Law on Cross Border Insolvency 1997 and the recommended Draft Part Z will illustrate the success of legal harmonisation and India’s contribution to this global shift.
Keywords: Cross Border insolvency, Legal Harmonisation, International Insolvency
