FINAL - Dissertation

“CROSS-BORDER INSOLVENCY UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016: A COMPARATIVE CRITICAL

ANALYSIS”
Dissertation submitted to
SVKM’s Narsee Monjee Institute of Management Studies (NMIMS)
in partial fulfilment of the requirements
for the degree of
B.B.A., LL.B. (Hons.)
By
Saaransh Shukla
Under the Guidance of

Dr. Tanmeet Kaur Sahiwal
NMIMS School of Law

Bengaluru
2023-2024
1
NMIMS School of Law, Bengaluru 2024
Certificate
The work described in this dissertation entitled “Cross-Border Insolvency under the
Insolvency and Bankruptcy Code, 2016: A Comparative Critical Analysis” has been
carried out by Mr. Saaransh Shukla under my supervision. I certify that this is his bonafide
work. The work described in this dissertation is original and has not been submitted for any
degree to this or any other university.
Date: Guide:
Place: Bengaluru
Assistant Professor
Head,
Department of Law
Dean, KPMSoL
SVKM’s NMIMS, School of Law

Bengaluru
2023-2024
2
Statement by the Candidate
This is to submit that this written submission in my dissertation entitled “Cross-Border

Insolvency under the Insolvency and Bankruptcy Code, 2016: A Comparative Critical
Analysis” represents my ideas in my own words and where others’ ideas or words have been
included, I have adequately cited and referenced the original sources. I also declare that I have
abided by all the principles of academic honesty and integrity and have not misrepresented or
fabricated or falsified any idea/ data/ fact/ source in my submission. I understand that any
violation of the above will be cause for disciplinary action by the School and can also evoke
penal action from the sources which have thus not been properly cited or from whom proper
permission has not been taken when needed.
This dissertation encompasses the information generated by me based on work carried out in
the school. I assure and hold full responsibility for its genuineness.
Mr. Saaransh Shukla
Forwarded Through
Academic Guide (s)

1. Name of the Guide : Dr. Tanmeet Kaur Sahiwal
Designation: Program Chairperson & Assistant Professor of Law
Department of Law,
NMIMS School of Law,
Bannerghatta Main Road,
Kalkere,
Bengaluru - 560083
3
ACKNOWLEDGEMENT
I would like to acknowledge my sincere gratitude and warmest thanks to my guide and
Program Chairperson, Dr. Tanmeet Kaur Sahiwal for her patience and constant support
throughout this dissertation. I am extremely grateful for her encouragement and constant
support throughout this dissertation. I am extremely grateful for her encouragement
throughout the process. I am sincerely grateful for her invaluable guidance, support and
suggestions to make this dissertation a successful one. I am really inspired by her way of
analyzing legal issues and would always be thankful to her for the knowledge and the advice
she has extended to me. I am appreciative for her valuable co-operation and encouragement.
I would also like to thank our Campus Director, Dr. Narayani Ramachandran and the Sr.
Assistant Librarian Mr. Vansatha D. and all the library staff for providing access to various
resources for the completion of this research project along with their continued support
towards me. Finally, I would like to thank my batchmates and my parents for all the
unconditional support in this very intense and crucial academic year.
Saaransh Shukla
4
LIST OF ABBREVIATIONS
List of Abbreviations Definition

IBC The Insolvency and Bankruptcy Code, 2016
BLRC Bankruptcy Law Reforms Committee
EC European Commission
EU European Union
NAFTA North American Free Trade Agreement
ILC Insolvency Law Committee
UNCITRAL United Nations Commission on
International Trade Law
CPC The Code of Civil Procedure, 1908
COMI Centre of Main Interest
FSB Financial Stability Board
CBIRC The Cross Border Insolvency
Rules/Regulations Committee
NCLT National Company Law Tribunal
NCLAT National Company Law Appellate Tribunal
IBBI Insolvency and Bankruptcy Board of India
FEMA Foreign Exchange Management Act, 1999
RBI The Reserve Bank of India
IDR Industries Development and Regulation Act
of India, 1951
SICA Sick Industrial Companies (Special
Provisions) Act, 1985
DRT Debt Recovery Tribunal
RDDBFI The Recovery of Debts Due to Banks and
Financial Institution Act, 1993
SPV Special Purpose Vehicle
SARFAESI The Securitisation and Reconstruction of
Financial Assets and Enforcement of
Security Interest Act, 2002
DRBA Debtor Rehabilitation and Bankruptcy Act
CBIR The Cross Border Insolvency Regulations
5
2006
MNCs Multinational Companies
FDI Foreign Direct Investment
MSMEs Micro, Small, and Medium Enterprises
MCA Ministry of Corporate Affairs
MLCBI Model Law on Cross-Border Insolvency,
1997
SBI State Bank of India
CIRP Corporate Insolvency Resolution Process
CoC Committee of Creditors
6
LIST OF CASES
Bank of New York Mellon, London Branch v. Cranes Software International Ltd 2014
SCC OnLine Kar 10105…………………………………………………..………………52
In Re: Arvind Mills Ltd., [2002] 111 Comp. Cas. 118 (Guj.)………………..…………..56
In re Namirei-Showa Co. Ltd High Ct (Ch) 16 October 2008, 7542/08, CLOUT 1004…40
In re Tri-Continental Exchange Ltd 349 B.R. 627 (Bankr. E.D. Calif. 2006……….........44
In Re Travancore National Bank Ltd., 1939 Mad. 318………………………………..….33
Intesa Sanpaulo S.P.A v. Videocon Industries Limited 2013 SCC Online Bom 1910…...55
Macquarie Bank Limited v. Shilpi Cable Technologies Ltd AIR 2018 SC 498……….....57
Marine Geotechnic LLC (Geotech) v Costal Marine Construction & Engineering Ltd 2014
SCC OnLine Bom 309……………………………………………………..……………..54
Reserve Bank of India v. BCCI AIR 1994 BOM. 177…………………………………...57
SBI v. Jet Airways (India) Ltd., CP 2205 (IB)/MB/2019…………………………….15, 58
State Bank of India v. Videocon Industries Ltd., 2019 SCC OnLine NCLT 745………...15
Sumikin Bussan International (HK) Ltd. v. King Shing Enterprises and Anr 2008 SCC
OnLine Bom 175………………………………………………………..………………...53
The Raja of Vizianagaram v. Official Receiver, AIR 1962 SC 500………………….32, 51
Transcore Vs. Union of India AIR 2007 SC 712…………………………………………33
7
TABLE OF CONTENT
Statement by the Candidate ....................................................................................................... 2

Certificate ................................................................................................................................... 2
ACKNOWLEDGEMENT ....................................................................................................... 4
LIST OF ABBREVIATIONS .................................................................................................. 5
LIST OF CASES....................................................................................................................... 7
TABLE OF CONTENT ........................................................................................................... 8
ABSTRACT ............................................................................................................................ 10
CHAPTER I: INTRODUCTION .......................................................................................... 11
1.1 Literature Review ...................................................................................................... 16
1.2 Research Objective .................................................................................................... 27
1.3 Research Statement .................................................................................................... 27
1.4 Research Questions .................................................................................................... 28
1.5 Research Methodology .............................................................................................. 28
CHAPTER II: LEGISLATIVE FRAMEWORK ................................................................ 29
2.1 Statutes Governing Cross-Border Insolvency in India .............................................. 32
2.2 Challenges in the Current Framework ....................................................................... 35
CHAPTER III: COMPARATIVE ANALYSIS AND INTERNATIONAL OVERVIEW
.................................................................................................................................................. 38
3.1 Comparative Analysis – UK And USA ..................................................................... 38
3.1.1 United Kingdom ................................................................................................. 38
3.1.2 United States of America .................................................................................... 40
3.2 International Overview .............................................................................................. 43
3.2.1 Singapore ............................................................................................................ 43
3.2.2 New Zealand ....................................................................................................... 44
3.2.3 Japan ................................................................................................................... 44
3.2.4 South Korea ........................................................................................................ 45
CHAPTER IV: THE NEED FOR CROSS BORDER INSOLVENCY MODEL LAW .. 47
4.1 Overview of The UNCITRAL Model Law on Cross-Border Insolvency ...................... 49
4.2 Draft ‘PART Z’ .......................................................................................................... 50
4.2.1 Differences Between The Proposed Draft Part Z And UNCITRAL Model
Law………………………………………………………………………………………51
4.3 Judicial Approach ...................................................................................................... 52
4.3.1 Jurisdiction of Indian Courts in Winding up Proceedings ....................................... 52
4.3.2 Recognition of Foreign Decree & Insolvency Proceedings .................................... 54
4.3.3 Access to Foreign Creditors ............................................................................... 55
CHAPTER V: RECOMMENDATIONS AND CONCLUSION ........................................ 61
8
5.1 Recommendations ...................................................................................................... 61
5.1.1 Adopting The Model Law .................................................................................. 61
5.1.2 Protocols on Cross Border Insolvency ............................................................... 62
5.2 Conclusion ................................................................................................................. 64
BIBLIOGRAPHY................................................................................................................... 67
9
ABSTRACT
‘Insolvency’ has developed as a significant concern for transition economies especially India
with the increasing dynamism of economic activity conducted worldwide. As multi-nationals
thrive, these concerns go beyond the domestic borders of a country. When domestic firms deal
with several contractual conflicts, it is quite obvious that a firm with international
engagements will have convoluted issues. The enactment of the Insolvency and Bankruptcy
Code (IBC) in 2016 has radically transformed India's corporate insolvency framework. While
the IBC has efficiently addressed domestic insolvency resolution, however it still stands on the
cross-roads with regard to having an effective legislative framework for addressing issues on
cross border insolvency. This paper examines the efficacy of Sections 234 and 235 of the IBC
2016 in enabling cooperation between Indian courts and foreign insolvency practitioners
seeking recognition under it. This is done by examining landmark judgment such as the Jet
Airways and others. The author analyses the extent to which the IBC incorporates the
UNCITRAL Model Law and the Draft Part Z as recommended by the committee. Though the
IBC defines the eligibility of foreign creditors to initiate domestic insolvency proceedings,
ambiguities exist regarding protocols for cross-border information exchange, choice of law,
reciprocal arrangements and other procedural aspects. These ambiguities can impede
international capital flows by affecting creditor rights and recovery rates. Keeping this in
mind, this paper attempts to analyse the Model Law from Indian perspective and the
implications of its adoption in India. For this purpose, this paper addresses how the U.S. and
UK implemented and interpreted the UNCITRAL Model Law on Cross - Border Insolvency.
But different ways of implementing and different interpretations in different countries may
hinder the prospects of law harmonization and coordination. Therefore, suggestions are made
to incorporate the Model Law, Protocols in a way to strike a balance between adopting
Model Law and safeguarding authority of Indian courts and most importantly, sovereignty.
Key Words: Cross Border Insolvency, Insolvency and Bankruptcy Code, Foreign Insolvency
Proceedings.
10
CHAPTER I: INTRODUCTION
The Insolvency and Bankruptcy Code, 2016 is a significant law that has been developed over
the past 8 years to align with the main goal of consolidating and amending the laws related to
the reorganisation and resolution of insolvency for corporate entities, partnership firms, and
individuals within a specified timeframe. The objective is to maximise the value of assets for
these entities, promote entrepreneurship, facilitate access to credit, ensure successful
resolution plans, and maintain a fair balance of interests among all stakeholders. 1 In the
present era, it is imperative to establish a cross-border framework to meet the economic
needs. The economic growth over the past three decades has been propelled by the processes
of liberalisation, modernization, and globalisation. This growth has been further facilitated by
the integration of information technology, which has enabled global participation at every
stage of the economic cycle, including sourcing materials, sharing production technology,
managing supply chains and logistics, and reaching the end consumer. The interconnection of
economies has led to significant amounts of cross-border investments, foreign borrowings,
and international migration. Despite the potential for success, there is a significant danger of
failure that is no longer limited to one country. This risk is exposed to systemic risk, which
can have a domino effect on all economies worldwide.
Each nation possesses its own set of IBC regulations that establish a structure for addressing
insolvency-related matters and establish a system for promptly recovering outstanding debts
from debtors who are unable to pay. However, what occurs when these problems exceed the
jurisdiction of domestic legislation? What are the implications when multinational
corporations have their operations, resources, debtors, and creditors spread across multiple
countries? These difficulties are not limited to a single nation. In this particular situation, the
concept of Cross Border Insolvency becomes relevant. Cross Border Insolvency refers to the
insolvency of debtors who possess assets or creditors in numerous countries, meaning they are
susceptible to insolvency proceedings in different jurisdictions.2
The expansion of the Indian economy has attracted foreign investors. The rise in the number
of foreign corporates providing financial support to Indian companies and establishing
industrial facilities has increased the significance and necessity of insolvency legislation.
Insolvency is the condition in which an individual or organisation is unable to meet their
1
The Insolvency and Bankruptcy Code, 2016, No. 37, Acts of Parliament, 2016 (India)
2
Manasi Lad-Gudhate, “Cross-Border Insolvency”, ICSI Web Modules, 67 (2023)
https://www.icsi.edu/media/webmodules/CSJ/April/15ArticleManasiLadGudhate.pdf
11
financial obligations. Put simply, an insolvent individual or organisation is unable of repaying
its debts. When examining the global business landscape, we see that cross-border investment
agreements and their results are significantly influenced by the insolvency laws in both
jurisdictions.3 This implies that a collection of insolvency laws establishes the basis for the
nature of foreign investment in a country.
Cross-border insolvency addresses three primary facets. Firstly, it safeguards the rights of
foreign creditors who possess specific entitlements to the assets of the debtor located in a
different country where bankruptcy proceedings are being conducted. Furthermore, in cases
when the debtors' assets are located in many jurisdictions, the creditor may seek to include
such assets in the insolvency processes taking place in separate jurisdictions. Secondly, if
insolvency proceedings are initiated or ongoing against the same debtor in many jurisdictions.
Following the liberalisation of the Indian economy in the 1990s, numerous Multinational
Companies started considering India as a potential market for providing loans to Indian firms.
This resulted in a significant increase in foreign direct investments in India. Thirdly, Indian
corporations and banks, through initiatives such as 'Make in India', have successfully attracted
a multitude of international financial institutions and creditors to establish their production
and operating facilities in India.4 Businesses are expected to experience long-term negative
effects as a result of the COVID-19 epidemic. The odds of default, as determined by market
forces, have risen in both G-20 and developing market countries as a result of the
consequences of the epidemic.5 Bankruptcies are expected to increase as companies deplete
their cash reserves.6
Due to the growing globalisation in the international business and trade market, there has been
a significant increase in the level of interconnectedness in financial markets and institutions.
There has been a necessity to establish a Cross Border Insolvency regime ever since. Despite
a notable growth in Cross Border Insolvency cases during the 1990's, there has been a lack of
3
Misra, P., Cross-border Corporate Insolvency Law in India: Dealing with Insolvency in Multinational Group
Companies—Determining Jurisdiction for Group Insolvencies 45(2), Vikalpa, 93, (2020)
https://doi.org/10.1177/0256090920946267
4
V. Anantha Nageswaran, The Indian Economy – A Review Department of Economic Affairs, 7, (2024)
https://dea.gov.in/sites/default/files/The%20Indian%20Economy-A%20Review_Jan%202024.pdf?app=true
5
Lilas Demmou, Insolvency and debt overhang following the COVID-19 outbreak: Assessment of risks and
policy responses, OECD (March 18, 2024) https://www.oecd.org/coronavirus/policy-responses/insolvency-and-
debt-overhang-following-the-covid-19-outbreak-assessment-of-risks-and-policy-responses-7806f078/
6
Id.
12
well-established structure for cooperation and coordination between local and foreign courts
and officials.7
However, complications occurred in cases when the creditors were from other countries or
when the assets of the bankrupt company were situated abroad, particularly when there were
multiple bankruptcy petitions filed against the same corporation in different legal
jurisdictions. Implementing a uniform and regulated system for dealing with insolvency cases
across different countries is a viable option to address these issues. To forward this objective,
the Government of India has recommended Draft Part Z in the IBC 2016. During the budget
sessions, the finance minister discussed the required modifications to improve the
effectiveness and simplify cross-border insolvency under the legislation.8
In India there had been several studies to examine how to integrate the cross-border
insolvency regime within the provisions in India. In the year 2000, a high level committee
was set up which was led by Mr. Justice V. Balakrishna Eradi which was also known as the
‘Eradi Committee’ and they proposed changes to the then exiting Companies Act, 1956. 9 The
amendment which was proposed it majorly aimed at incorporating specific provisions for
cross-border insolvency similar to the Model Law.10 Then an advisory group was incorporated
for the insolvency laws, which was led by Prof. Dr. N.L. Mitra, the report which they
submitted was a thorough examination on the existing cross border insolvency issues faced in
India and also proposed changes on the same.11 The report submitted by Dr. Mitra highly
recommended the implementation of Model Law in the country. BLRC in its latest report
again mentioned and highlighted the need for establishing a proper mechanism and structure
to address the cross-border insolvencies in India.12 In its Interim Report, the BLRC explicitly
stated that a more thorough investigation is needed before implementing a framework based
on the Model Law.13
7
United Nations Commission on International Trade Law,
https://uncitral.un.org/en/texts/insolvency/modellaw/cross-border_insolvency, (last visited Mar. 18, 2024)
8
Ishwari Chavan, Explained: Cross border insolvency law, and why amendments in IBC are necessary, ETBFSI,
(Mar. 18, 2024), https://bfsi.economictimes.indiatimes.com/news/industry/explained-cross-border-insolvency-
law-and-why-amendments-in-ibc-are-necessary/89542595
9
Mr. Justice V. Balakrishna Eradi, Law Relating to Insolvency And Winding Up Of Companies, IBBI, 1, 42-43
(2000)https://ibbi.gov.in/uploads/resources/July%202000,%20Eradi%20Committee%20Report%20on%20Law%
20relating%20to%20Insolvency%20and%20winding%20up%20of%20Companies.pdf
10
Id. at 45
11
Dr. N.L. Mitra, Report of The Advisory Group on Bankruptcy Law, RBI 36-37 (2001)
https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/20811.pdf
12
Shri Injeti Srinivas, Report of the Insolvency Law Committee, MCA, Govt. of India, 6, (2018)
https://ibbi.gov.in/ILRReport2603_03042018.pdf
13
Mr. T.K. Vishwanathan, Interim Report of The Bankruptcy Law Reform Committee, Ministry of Finance, 6,
(2015) https://msme.gov.in/sites/default/files/Interim_Report_BLRC.pdf
13
The BLRC highlighted the importance of considering various documents, such as the EC
Regulation on Insolvency Proceedings, the American Law Institute's NAFTA Transnational
Insolvency Project, and the International Bar Association Cross-Border Insolvency
Concordat, when developing the domestic cross-border insolvency framework.14
The BLRC report emphasised on the fact that the plan must occur only after the provisions
enshrined in the code have been properly implemented and is in place, since their must be a
provision in order to have a effectiveness over the plan for cross border insolvency.
The ILC is a recent organisation that has offered feedback regarding cross-border insolvency
regime in the country. In its’s interim report they emphasised the need of establishing a
comprehensive cross-border insolvency regime in the country.15 However, like the findings of
the BLRC report, it acknowledged that implementing a framework based on the Model Law is
a challenging task that would necessitate an examination of global practices in this area.
According to the Interim Report of the Advisory Group on Bankruptcy Laws from January
2001, headed by Dr. N. L. Mitra, it was discussed that with the increasing cross-border
investment, trade, and commerce, there will be a rise in cross-border insolvency issues. This
will affect both Indian companies with entities or ventures outside the country, as well as
foreign entities with subsidiaries and ventures in India. An all-encompassing Bankruptcy code
is obligated to tackle these challenges while considering worldwide standards.16
The selection of a framework, however, is contingent upon factors such as the extent of a
country's connection with the global economy, the current level of development of its
insolvency system, and the overall maturity of its legal systems, among other considerations.
The purpose of the IBC was to tackle cross border bankruptcy by empowering the Central
Government to establish agreements or reciprocal arrangements with other nations to enforce
the provisions of the Code. Furthermore, the Code allows the Adjudicating body to write a
letter of request to a Court or competent body in these countries to obtain evidence or take
action related to proceedings under the Code.
14
Id.
15
Shri Injeti Srinivas, Report of Insolvency Law Committee on Cross Border Insolvency, MCA, Govt. of India,
16, (2018) https://www.mca.gov.in/Ministry/pdf/CrossBorderInsolvencyReport_22102018.pdf
16
Dr. N.L. Mitra, supra note 11.
14
The primary objective of having uniform laws is to avoid multiplicity of proceedings in each
jurisdiction where debtor has his assets.17 Different countries may have different insolvency
policies for cross border issues for the assets within the jurisdiction, but the two predominant
regimes represent universalism and territoriality.18 Theory of universalism represents the idea
of a single insolvency procedure for the management of the insolvency of a debtor operating
in multiple jurisdictions.19 All-inclusive approach would level out the losses or inequitable
gains that occur to domestic lenders who might remain to get as much from the decision of
the local court and acknowledgment of this reality by foreign courts.
At the other end of the spectrum is the theory of territorialism that proposes initiating
proceedings at every jurisdiction where debtor operates in order to assume control over his
assets under local laws. The primary advantage of this approach is that the local creditors are
able to capitalize from the domestic pool of assets20. Therefore, the historically accepted
territorial theory advocated in favour of protecting sovereign interest more than universal
economic co-operation. Nevertheless, reorganizing assets for rehabilitation of company is not
a viable option through territorialism, as the domestic cases are focused on the creditor’s
interest.
The lack of a framework for resolving cross-border insolvency raises various unresolved and
ambiguous concerns, as demonstrated by recent cases such as Jet Airways 21 and Videocon.22
If insolvency procedures have been initiated in India for a debtor who possesses assets
overseas, what steps can be taken to prevent such assets from becoming the subject of a
concurrent legal process in the foreign jurisdiction? What happens if there are simultaneous
insolvency proceedings in multiple jurisdictions regarding the debtor and its assets? One
potential approach to address these issues is to achieve a certain level of harmonization of
insolvency rules across numerous jurisdictions. Given the numerous fundamental disparities
among the legal systems of different countries, it is imperative to actively pursue the objective
of harmonizing these statutes.
17
Sean E. Story, Cross Border Insolvency: A comparative Analysis, Vol. 32, No. 2, Arizona Journal of
International & Comparative Law, 431, 445-446 (2015) http://arizonajournal.org/wp-
content/uploads/2015/11/Story.Final_2.pdf
18
Ryan Halimi, An Analysis of the Three Major Cross-Border Insolvency Regimes" International Immersion
Program Papers 47 (2017) http://chicagounbound.uchicago.edu/international_immersion_program_papers/47
19
Westbrook, Jay Lawrence, Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of
Forum, Vol. 65, Issue 4, American Bankruptcy Law Journal, (1991)
20
Paul J. Omar, The Landscape of International Insolvency, Vol. 11, International Insolvency Law Review, 174-
177 (2002) https://doi.org/10.1002/iir.104
21
SBI v. Jet Airways (India) Ltd., CP 2205 (IB)/MB/2019
22
State Bank of India v. Videocon Industries Ltd., 2019 SCC OnLine NCLT 745
15
1997 2016 2017
UNCITRAL Model Insolvency and Insolvency Law

Law on Cross- Bankruptcy Code Committee’ was
Border Insolvency was established formed by the
came into effect. in India. Ministry of
Corporate Affairs.
2020 2018
January: Cross Border Insolvency March: 1st Part of the ILC
Rules/ Regulations Committee Report was published
(CIRBC) constituted. October: 2nd Part of ILC
June: First Part of Committee Report Report was published with
was presented to MCA. Draft Part Z.
In this paper, the author has analysed the existing legal framework in India dealing with this
issue, the emerging trends and problems faced due to insufficiency of laws. The primary
intention is to understand if the theory of modified universalism, as suggested by the Model
Law is effective practically. Further after a comparative study with cross border scenario in
various jurisdictions specifically in US and UK, an attempt has been made to provide a
solution to the current situation.
1.1 Literature Review
1. A. K. Sikri (2001) “Cross Border Insolvency: Court-To-Court Cooperation” 23
The paper argues India should adopt the UNCITRAL Model Law on Cross-Border
Insolvency to provide a modern, harmonized framework. The model law offers solutions
around access, recognition, relief, and cooperation. The paper highlights some key issues
in cross-border insolvencies that the UNCITRAL model law could address - which court
has jurisdiction, single vs separate proceedings, recapture of assets, and coordination
between courts. J. A.K. Sikri outlines that adopting the UNCITRAL model law would
boost foreign investment and trade in India. It would enable better outcomes for creditors
and debtors compared to the territorial approach. The model law provides a modern,
23
Journal of the Indian Law Institute, 51(4), pp. 467–493, http://www.jstor.org/stable/43953465
16
harmonized legal framework attuned to globalization. The paper makes a strong case that
adopting the UNCITRAL Model Law or similar legislative framework would help
modernize India's approach to cross-border insolvency. It would provide more
predictability and reliability in line with globalization trends.
2. Ran Chakrabarti (2018) “Key Issues in Cross-Border Insolvency”24
The paper outlines three common cross-border insolvency scenarios for Indian companies:
(a) an Indian entity with domestic and foreign creditors; (b) an Indian entity guaranteeing
debt of foreign subsidiaries; (c) a foreign entity with foreign creditors and assets in
multiple countries including India. Issues include determining jurisdiction, recapture of
overseas assets, and coordination between Indian insolvency proceedings and foreign
creditor actions. The paper highlights that the foreign judgments are recognized under
CPC principles, which may not cover insolvency proceedings. Adopting the Model Law
would provide a clearer framework. The paper examines the treatment of assets held
directly or indirectly overseas by an Indian company facing insolvency. It notes that assets
of foreign subsidiaries are not assets of the parent under corporate law principles. The
paper emphasizes determining the centre of main interest and location of assets as key to
navigating cross-border insolvency. It advocates a procedural approach respecting
different legal regimes. Adopting the Model Law would provide clarity but not necessarily
change foreign creditor rights.
3. Nidhi Shetye (2016) “International Insolvency: An Indian Perspective on Cross-Border

Treatment of Cases”25
The author has very intricately dealt with the cross-border insolvency issues faced by
India and gives a detail note on the current status of legal framework. Also, the extent
judicial intervention in absence of backing statute has been explained, which has helped
the researcher formulate a view on judicial gap filling. The author, however, has focused
only on the insufficiency of law and not the options available before India. The conclusion
of this article seems to lean in favor of conventions or individual agreements with
neighboring countries, which has been disputed in this research paper.
24
National Law School of India Review 30, pp. 119-135
25
Fordham Internation Law Journal, Vol 39 Issue 4, https://ir.lawnet.fordham.edu/ilj/vol39/iss4/3
17
4. Dr. Deane, F., and Mason, R. (2016) “The UNCITRAL Model Law on Cross‐border
Insolvency and the Rule of Law”26
This paper highlights the importance of the global financial and business landscape,
especially when dealing with cross-border bankruptcies. It examines how the UNCITRAL
Model Law on Cross-Border Insolvency and its Enactment and Interpretation Guide
promote key principles of the rule of law in international cases arising from companies
facing financial distress. The paper provides several examples from the Asia-Pacific
region where the Model Law has been applied, demonstrating how the rule of law can be
upheld in bankruptcy proceedings. Ultimately, the paper concludes that adopting the
UNCITRAL Model Law on Cross-Border Insolvency fosters transparency, accountability,
and consistency. These factors, in turn, support stability in financial systems, credit
relationships, and trade within the global marketplace. In essence, the paper underscores
the significance of the UNCITRAL Model Law as a framework for effectively managing
cross-border insolvencies while promoting crucial legal principles and facilitating global
financial stability and commerce.
5. Bhavi Shah & Shaivi Awasthy (2021) “Inefficacy of Cross Border Insolvency
Framework in India”27
The paper traces the history of law-making on cross-border insolvency in India, starting
with the ‘Eradi Committee’ report in 2000 which recommended adopting the UNCITRAL
Model Law. The Jet Airways insolvency case is analyzed to demonstrate gaps in the
current framework and urgent need for a cross-border insolvency regime. The paper
discusses certain issues India should consider when adopting the Model Law such as
defining COMI, judicial cooperation, avoiding abuse of discretionary powers. The author
makes a strong case for India to adopt the Model Law given recommendations by various
committees since 2000, increasing cross-border insolvency cases, and greater certainty
that it can provide.
6. Feibelman, Adam and M, Priya (2021) “The Institutional Challenges of A Cross-

Border Insolvency Regime”28
The paper discusses the challenges of managing cross-border insolvency proceedings

involving a common debtor, using the Jet Airways case to illustrate overlapping
26
International Insolvency Review, 25: 138–159. https://doi.org/10.1002/iir.1252
27
IJLLR Vol.2 Iss.2. 1 https://doi-ds.org/doilink/08.2021-82137798/IJLLR/V2/I2/A92
28
Arizona St. Univ. Commercial and Business Law Journal, http://dx.doi.org/10.2139/ssrn.3893126
18
proceedings in India and the Netherlands. The paper notes that cross-border insolvency
management has improved but remains an evolving legal domain lacking consistent
cooperation and coordination. The paper argues addressing cross-border insolvency was
inevitable given India's global integration, but IBC drafters decided against adopting the
UNCITRAL Model Law despite prior recommendations. The paper suggests institutional
challenges like judicial capacity and willingness to cooperate internationally may be more
significant than technical design choices for the cross-border regime.
7. Andrew Godwin, Risham Garg, Debaranjan Goswami (2023) “Cross-Border

Insolvency Law in India: Are The Principles Of Comity of Courts And Inherent
Common Law Jurisdiction Relevant?”29
The authors contend that it is advisable for foreign representatives to actively seek support
from commercial courts in India based on common law principles. Furthermore, the
authors propose that India should maintain several avenues for acknowledging cross-
border insolvency even after implementing the Model Law. The argument posits that the
acknowledgment and support of cross-border bankruptcy cases based on common law
principles and the inherent authority of the courts can be a beneficial option prior to the
implementation of the Model Law. The text raises the question of whether the legislature
intends for these measures to be the only method to achieve recognition and aid, or if they
want to keep multiple options for dealing with cross-border insolvency. This lack of
clarity generates uncertainty and has the potential to result in inconsistent interpretations
and implementation of the legislation. The authors contend that interpreting the provisions
as an exclusive gateway is in conflict with the principles described in Article 5 of the
proposed law, which is consistent with the non-exclusive character of the Model Law.
The authors could have explored the potential conflicts or inconsistencies that may arise
when applying common law principles in the context of cross-border insolvency,
especially when dealing with diverse legal systems and principles of international comity.
8. Mohan S. Chandra (2012) “Cross-border Insolvency Problems: Is the UNCITRAL

Model Law the Answer?”30
The paper examines the impact and adoption of the UNCITRAL Model Law on Cross-
Border Insolvency by countries around the world. It highlights that despite being widely
29
International Insolvency Review, 32(2), 228–252. https://doi.org/10.1002/iir.1500
30
International Insolvency Review, Vol. 21, Issue 3, pp 199-223,
https://ink.library.smu.edu.sg/sol_research/1145
19
acclaimed, the Model Law has been adopted by only 19 countries in the last 15 years, and
even those adoptions have been in varying degrees and with modifications. The paper
questions the reasons behind this lack of enthusiasm for adopting the Model Law and
explores its future in dealing with cross-border insolvencies. The paper critically examines
the potential limitations of the Model Law in addressing the complex substantive issues
involved in cross-border insolvencies, which may contribute to its limited adoption. While
the paper identifies the lack of enthusiasm for adopting the Model Law, it does not
provide a comprehensive analysis of the specific reasons behind this reluctance among
countries. While the paper questions the future of the Model Law, it does not extensively
explore potential alternative frameworks or solutions for addressing cross-border
insolvencies.
9. Gopalan Sandeep and Guihot Michael (2015) “Recognition and Enforcement in

Cross-Border Insolvency Law: A Proposal for Judicial Gap-Filling”31
In this paper, the author analyses the conflict between different national laws regarding
important issues such as the acknowledgment of security interests, the distribution of
assets, and the varying policy preferences that determine the protection of different types
of creditors. These conflicts create challenges since each country has designed its
bankruptcy laws based on specific political needs and the desires of its inhabitants, which
represent distinct agreements between protecting creditors and debtors. Despite its
significant financial significance and intricate intellectual nature, the field of cross-border
insolvency.
law continues to be characterized by a lack of clarity. This article examines the

acknowledgment and implementation of cross-border insolvency judgements from the
United States, United Kingdom, and Australia. Its aim is to assess whether the
UNCITRAL Model Law's objective of modified universalism is presently being applied.
The article also analyses the Model Law using international relations theories to propose a
future course of action.
31
Vanderbilt Journal of Transnational Law, Vol. 48:1225, https://scholarship.law.vanderbilt.edu/vjtl/vol48/iss5/3
20
10. Halimi Ryan (2017) “An Analysis of the Three Major Cross-Border Insolvency
Regimes”32
In this paper, the author has undertaken a comparative analysis of three major insolvency
regimes namely United States, Singapore and Hong-Kong. The United States employs a
universalism framework that mandates countries with the company's assets to submit them
to the primary court procedure. In contrast, Singapore's previous territoriality system
grants its courts the authority to enforce its local insolvency rules independently, without
considering other legal procedures. Hong Kong employs a modified version of
universalism that combines elements of both universalism and territoriality. Furthermore,
the author examines the financial failure of the hypothetical firm DroneCo to explore the
functioning of cross-border insolvencies in the three regions.
The author on one hand has dealt with the approaches of these states in adoption of Model
Law in order to recognize the foreign proceedings and on other hand brought out the
glaring gaps and inadequacies of switching to Model Law. For the purpose of this
dissertation, this working paper provides great insights on pros and cons of adopting the
Model Law.
11. Shashank Saksena (2022) “Implementation Issues in Cross Border Insolvency

Framework in India”33
The author argues for increased consistency, recognition, coordination and predictability
under a global cross-border insolvency framework. The paper highlights the use of cross-
border protocols and communication frameworks is advocated to ensure cooperation
between authorities. The paper has analysed India's Fugitive Economic Offenders Act
2018, which confiscates assets of fugitives evading prosecution and deters them from
making civil claims. The paper highlights two major cross-border insolvency
implementation issues - use of soft law instruments and practices, and complementarity
with international arrangements for executing avoidance transactions orders. Further, It
weighs pros and cons of soft law instruments, arguing they can supplement but not
substitute cross-border frameworks. Strengthening existing mechanisms for economic
crimes is recommended to aid execution of avoidance orders.
32
International Immersion Program Papers,
http://chicagounbound.uchicago.edu/international_immersion_program_papers/47
33
IBBI, Idea, Impressions and Implementation, pp. 287-294
https://ibbi.gov.in/uploads/whatsnew/b5fba368fbd5c5817333f95fbb0d48bb.pdf
21
12. Mevorach Irit (2018) “The Future Of Cross-Border Insolvency: Overcoming Biases
and Closing Gaps.”34
This book chapter discusses the future of cross-border insolvency law, advocating for a
system based on the principle of modified universalism. The author argues that a bright
future for cross-border insolvency, fitting current market conditions and increasing global
welfare, is achievable through modified universalism. Applying insights from behavioral
economics and psychology to understand decision-making biases that impact choices in
cross-border insolvency, such as loss aversion, endowment effect, status quo bias, and
framing effects. Advocating for limited harmonization focused on standardization, closing
regulatory gaps, and governing sophisticated entities, while preserving space for
innovation across jurisdictions. The paper critically examines the choice of legal
instruments, highlighting the advantages of model laws over treaties for complex, multi-
party issues like cross-border insolvency. The paper predominantly focuses on the benefits
and challenges of modified universalism but does not extensively discuss potential
alternatives or critiques of the approach itself. While some areas could benefit from
further elaboration or empirical support, the paper offers a thought-provoking and well-
reasoned analysis of the challenges and prospects for cross-border insolvency law.
13. Sudhaker Shukla and Kokila Jayaram (2020) “Cross Border Insolvency - A Case To
Cross The Border Beyond The UNCITRAL”35
It examines the need for robust cross-border insolvency frameworks, especially in light of
the ongoing COVID-19 pandemic, which has highlighted the challenges posed by
multinational insolvencies. The paper evaluates various alternatives to the UNCITRAL
Model Law, including regional efforts, bilateral arrangements, and frameworks proposed
by organizations like the FSB. The paper critically examines the limitations of the
UNCITRAL Model Law, particularly its inadequacy in addressing special entities like
banks and financial institutions, which are crucial for financial integration. The paper
suggests that India should consider a tailored approach that goes beyond the Model Law,
drawing inspiration from frameworks like the FSB's principles for cross-border resolution
of banks and financial entities. While the paper mentions the limited adoption of the
34
Oxford University Press, https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/04/future-cross-border-
insolvency-overcoming-biases-and-closing-gaps
35
In Insolvency and Bankruptcy Regime In India - A Narrative (IBBI) pp. 307-322,
https://ibbi.gov.in/uploads/resources/c3593c9f41984c6f31f278974de3cf37.pdf
22
Model Law, it lacks a comprehensive empirical analysis of the reasons behind this
reluctance across different jurisdictions.
14. Lund, Anna J. (2015) “Book Review: International Insolvency Law: Reforms and
Challenges”36
The book provides an important insight as contributions are made by various groups of
experts, both academic and professional from across the world. It approaches insolvency
from a very distinct perspective i.e. to appreciate differences of conclusions arrived at by
various researchers. The book shows that comparative law and universal bankruptcy law
are associated fields, and shows how comparative approach can guide the improvement of
standards overseeing worldwide bankruptcy procedures. For instance, one contributor
inspects the challenge between bankruptcy law and the administrative change of the
universal credit subordinate market. This brings out the implications on industry due to
global financial crisis. This book fills in as a great acknowledgment of the broadness of
work being undertaken over the worldwide bankruptcy network.
15. Jay Westbrook, Lawrence, Charles, Paulus, Christoph, Rajak, Harry (2010) “A
Global View of Business Insolvency Systems”37
The author provides an intelligible outline of the insolvency framework implemented

around the world and a offer an analysis of the impact of harmonizing them into a
universally accepted legal system. One of the downsides, however, is that is focuses on
corporations and remains silent on application of cross-border laws on natural persons. In
this book, the authors have discussed the intricate details of the various approaches
adopted administer an insolvency dispute raised against a corporate debtor. For instance,
the book argues the cost efficiency of policies dealing with resolution of insolvency and
what alternations must be made by the legislature to derive further benefits. While doing
the said analysis, the authors accentuate the intricate and complex interrelationship shared
between each of the elements involved in insolvency proceedings i.e. debt recovery
scheme by resolution professionals and liquidation officer, enforcement through courts,
co-ordination and harmonization by foreign representatives, trustees and other interested
persons apart from debtors and legal advisors of each of them. The book however suggests
that dissection of these elemennts for framing policy decisions rather than being regarded
36
Osgoode Hall Law Journal 52.1 pp. 311-319, https://doi.org/10.60082/2817-5069.2799
37
The World Bank, 2010,
https://edisciplinas.usp.br/pluginfile.php/1759173/mod_resource/content/1/A%20Global%20View%20of%20Bu
siness%20Insolvency%20Syste%20-%20World%20Bank.pdf
23
as a whole system, demerits the functioning of international laws. It is rather a study of
bankruptcy laws of different jurisdictions within close perspective of the corporate laws in
general.
16. Neeti Shikha (2020) “India’s Tryst with Cross Border Insolvency”38
The paper discusses the challenges and opportunities presented by the UNCITRAL Model
Law on Cross-Border Insolvency (Model Law) in the context of India's recent adoption of
an insolvency regime. The author acknowledges the need for an international resolution
framework for cross-border insolvencies, which have been a concern for over 700 years
due to the growth of international trade and investments. The paper is divided into four
parts: Challenges and opportunities of the Model Law, Evaluation of the Model Law on
Insolvency-related Judgments (MLJ), The paper acknowledges that the adoption of the
Model Law is not a panacea for all future cross-border issues, highlighting the need for
well-developed rules of private international law and a harmonized development of
jurisprudence with commercial laws. While the paper acknowledges the need for well-
developed private international law jurisprudence, it does not provide specific
recommendations on how India can achieve this.
17. Confederation of Indian Industry (2019) “Cross-Border & Personal Insolvency in

India – Roadmap For Implementation”39
The paper discusses the need for a robust cross-border insolvency framework in India,
considering the country's increasing presence in the global investment arena. It highlights
the provisions for cross-border insolvency under Sections 234 and 235 of the IBC 2016
and the recommendations of the ILC Report to adopt the UNCITRAL Model Law on
Cross-Border Insolvency.
The paper acknowledges the Model Law's acceptance by 44 countries, including the UK,
Singapore, and the US, and its role in assisting countries in regulating corporate
insolvency and financial distress for companies with assets or creditors in multiple
countries. The paper suggests that India should adopt an indicative list of factors for
38
IBBI; Insolvency and Bankruptcy Regime in India: A Narrative pp. 323-334,
https://www.ibbi.gov.in/uploads/whatsnew/2020-10-01-210733-43cms-
9224c9b668aac0d6149a5d866bfb4c79.pdf
39
NLU Delhi,
https://nludelhi.ac.in/download/ssr/Book%20Chapter/Dr.%20Risham%20Cross%20Border%20and%20Personal
%20Insolvency%20in%20India.pdf
24
determining COMI, similar to other jurisdictions, rather than relying solely on the
rebuttable presumption of the registered office's location as provided in the Draft Part Z.
The paper supports the ILC's suggestion to adopt the reciprocity principle in implementing
the regulations on cross border insolvency. However, it also highlights the need for further
clarity and guidance on certain aspects, such as the interpretation of public policy and the
scope of the reciprocity provision.
18. Dr. K.P. Krishnan (2020) “Report on The Rules And Regulations For Cross-Border
Insolvency Resolution”40
The reviewed report focuses on the implementation of Part Z, which is the proposed cross-
border insolvency framework in India under the IBC. It provides recommendations on
rules, regulations, and notifications necessary for the recognition and cooperation of
foreign insolvency proceedings. The report also highlights the need for amendments to
various acts and identifies key issues and challenges in establishing a robust and
comprehensive cross-border insolvency framework. Key issues and recommendations-
The IBC's applicability to international corporations and foreign LLPs. Benches
specifically designated for the resolution of legal disputes involving subjects that traverse
international borders, A system designed to facilitate and oversee the activities of foreign
officials. Framework for enabling Indian IPs to access overseas legal proceedings,
Notification of legal proceedings, Reliefs pertaining to situations of insolvency that
include many jurisdictions, Information regarding the format, substance, and fees for
cross-border insolvency applications in India.
The CBIRC provides suggestions for each of these issues, along with the underlying
rationale. Lastly, the CBIRC has also provided suggestions regarding the need for
enhancing the capabilities of the NCLT and the IBBI to effectively handle cross-border
issues. Addressing the complexities of court-to-court cooperation, protocols, and the
determination of a corporate debtor's COMI would have strengthened the report's analysis.
40
Ministry of Corporate Affairs; Government of India, https://ibbi.gov.in/uploads/whatsnew/2021-11-23-
215206-0clh9-6e353aefb83dd0138211640994127c27.pdf
25
19. Soham Chakraborty (2020) “Reciprocity Requirements in India’s Adoption of The
UNCITRAL Model Law on Cross Border Insolvency”41
The paper argues against reciprocity, noting it would limit recognition of foreign
proceedings and undermine the Model Law's objectives. The paper outlines how Sections
234 and 235 of the Code permit cooperation with foreign courts contingent on bilateral
agreements. It notes India has no such agreements currently. The Jet Airways case
demonstrated the need for clearer rules through adopting the Model Law. The paper
highlights the Insolvency Law Committee recommended legislative reciprocity, meaning
India would recognize only jurisdictions that have adopted the Model Law or similar
legislation. The paper concludes reciprocity is detrimental to India's economic interests.
Checks in the Model Law prevent abuse without reciprocity. India adopting the Model
Law without reciprocity could encourage other regional countries to follow.
20. Aparna Ravi (2016) “Filling in The Gaps in The Insolvency And Bankruptcy Code –
Cross Border Insolvency”42
It highlights the conspicuous absence of cross-border insolvency provisions in the IBC of

India, which is a significant gap given the increasing globalization of businesses and the
likelihood of companies having assets, operations, or creditors in multiple jurisdictions.
The paper critiques the proposal of the Joint Parliamentary Committee to address cross-
border insolvency through bilateral agreements, arguing that this approach is laborious,
time-consuming, and can lead to inconsistencies across different bilateral agreements. The
paper identifies several key issues and considerations that India should evaluate while
adopting the Model Law, including determining the COMI for multinational corporations,
the reciprocity principle, and the interaction with domestic laws like the FEMA and
capital control requirements. The paper identifies the interaction with domestic laws like
FEMA and capital control requirements as a critical issue, but it does not offer specific
solutions or recommendations on how to address potential conflicts or challenges.
41
IndiaCorpLaw, https://indiacorplaw.in/2020/02/reciprocity-requirements-in-indias-adoption-of-the-uncitral-
model-law-on-cross-border-insolvency.html
42
IndiaCorpLaw, https://indiacorplaw.in/2016/05/filling-in-gaps-in-insolvency-and.html
26
1.2 Research Objective
Research on the subject matter is being undertaken to achieve the following objectives:
1. To analyse the legislative intent, key provisions, and practical implications of the
IBC's cross-border insolvency mechanisms.
2. To examine the alignment of the IBC's cross-border insolvency framework with
international standards and best practices, such as the UNCITRAL Model Law on
Cross-Border Insolvency through case studies and judicial precedents.
3. To conduct a comparative evaluation of the IBC's cross-border insolvency regime with
the frameworks of the United Kingdom and the United States, highlighting
similarities, differences, and potential areas for improvement and thus analyse the
shaping of cross-border insolvency.
1.3 Research Statement

The researcher has devised a structured approach to streamline the dissertation into four major
chapters. In the first phase, the researcher conducted an extensive review of journal articles,
reports from statutory bodies as well as independent firms, the legislative framework, and.
Furthermore, the researcher has written an introductory chapter along with the literature
review covering the background, significance, objectives, research questions, methodology,
and scope of the study. This chapter incorporates relevant data points sourced from RBI,
IBBI, High-Level Committee Reports of the Government of India, and other relevant sources.
In the second phase, the researchers has tried to understand the exsiting legislative framework
and the statues governing cross-border insolvency in Inda. The researcher has also put
forward some challenges that the current legal system regarding the cross border insolvency
cases.
In the third phase, the researcher will also present a comparative analysis of cross-border
insolvency laws across different jurisdictions, focussing on UK and USA assessing the IBC
2016's alignment with international standards and drawing lessons from other legal systems
In the fourth phase, the chapter will explore the need for Cross-Border Insolvency Laws in
India. It will focus on need for implementing UNCITRAL Model Law and also discussed the
Draft Part Z as introduced by the Government. The chapter will also discuss the judicial
proceedings in Indian cross-border insolvency cases, examining the adjudication process and
analyzing landmark decisions.
27
In the final phase, the researcher will conclude the dissertation, providing recommendations
for policymakers and stakeholders and conclusion. The dissertation will also include a
comprehensive reference list and relevant appendices with supplementary materials.
1.4 Research Questions

1. What is the current legal framework for the cross-border insolvency in India and how is it
compared to the international standards like the UK and the USA?
2. What challenges and loopholes exist in the current cross-border insolvency framework
under the IBC 2016, and what is the need to implement the UNCITRAL Model Law in
India, as supported by relevant case studies?
1.5 Research Methodology

This author has adopted a doctrinal and non-empirical legal research technique due to the
extensive nature of the research issue. To conduct a thorough investigation of the research
subject 'Comparative Study of Cross-Border Insolvency in USA and UK' in a verified
manner.
Consequently, the pertinent information and data needed for its completion have been
primarily collected from secondary sources, including books, journals, periodicals, research
articles, and proceedings of selected seminars, conferences, and websites.
28
CHAPTER II: LEGISLATIVE FRAMEWORK
With the aim to promote the principles of a social, economic and political justice enshrined in
the Preamble to the Indian Constitution, the state strives to provide an effective system for
dispensation of justice. As far as insolvency resolution is concerned, the Indian Constitution
empowered both the Parliament and State Legislature to enact laws relating to insolvency.43
Consequently, a number of overlapping legislative acts and regulations on this subject made
the insolvency, liquidation and reorganisation process not only very chaotic but led to delays
and conflicts between these various laws and legal forum.44
The current legal framework does not provide for a comprehensive policy is resolving
international insolvency matters. In fact, the laws are disorganised and distorted among
several statutes that leads to further complications45. Though the revamping has been
initiated with introduction of IBC in the year 2016, which provides for restructuring a
company undergoing insolvency proceedings, in a time bound manner, rather than having
focus on liquidation. Under IBC, the debt laden company enters into an agreement with the
committee of lenders. Additionally with the assistance of resolution advisors (called as
insolvency resolution professional), bring in investors and support in consulting creditors,
negotiating the plan, seeking support from major creditors and ensuring that the plan complies
legally. Finally, the agreed plan is approved and implemented in accordance with the
insolvency law through the formal process. But the law is practically silent on cross-border
issues. Therefore this chapter focuses on the existing laws in India and how they have been
rather irrelevant in comprehending the intricacies of international insolvency and the
inevitable disputes arising from it.
Sections 234 and 235 of the Code pertains to cross border insolvency.46 These sections
authorise the government to establish treaties and empower the AA under the Code to
43
‘Bankruptcy and Insolvency’ is an item specified in Entry 9 of List III of The Constitution of India.
44
Insolvency – Law And Practice Module 3 Elective Paper 9.8, ICSI, 1, 31-33, (2019)
https://www.icsi.edu/media/webmodules/ILP_Study_with_TP.pdf
45
See, N.L. Mitra Advisory Group on Bankruptcy Laws (May 9, 2001) at page 11. Mithilesh Kumar, Cross
Border Insolvency: Indian Law Vis A Vis International Law: UNCITRAL Model, MONDAQ: INDIAN LEGAL
IMPETUS (12 Aug,2013) (expressing the inefficiency of existing laws)
http://www.mondaq.com/india/x/257314/international+trade+investment/Cross+Border+Insolvency+Indian+La
w+Vis+A+Vis+International+Law+UNCITRAL+Model. (accessed on Dec. 2, 2018)
46
The Insolvency and Bankruptcy Code, 2016, § 234 & 235, No. 31, Acts of Parliament, 2016 (India)
S. 234: Agreements with foreign countries- (1) The Central Government may enter into an agreement with the
Government of any country outside India for enforcing the provisions of this Code.
(2) The Central Government may, by notification in the Official Gazette, direct that the application of provisions
of this Code in relation to assets or property of corporate debtor or debtor, including a personal guarantor of a
29
formally request a court of another country, with whom an agreement has been entered, to
deal with the assets in a particular manner. The provisions in these sections will be applicable
in cases where Indian legal proceedings necessitate recognition, assistance, etc. from foreign
jurisdictions, as well as in cases where foreign legal proceedings require the same in India.
Theoretically, this should create a framework for foreign representatives to obtain

authorization from Indian courts to manage assets in India, in line to the insolvency laws of
the competent jurisdiction where the main foreign proceedings were initiated, for a debtor
who owns assets in India. To ensure the recognition of international procedures in India, CPC,
would be implemented, together with the principles of English common law. However, it is
important to remember that this method may not be comprehensive enough to encompass
certain insolvency-related proceedings. Similarly, in order for Indian legal processes to be
acknowledged in another country, the procedural regulations of that foreign jurisdiction shall
be enforced. Countries that have implemented the UNCITRAL Model Law must offer
acknowledgment, support, collaboration, and suitable remedies for bankruptcy procedures
initiated in India, unless they have specifically demanded reciprocity.47 As of 2021, the
UNCITRAL Model Law has been adopted by 60 States in a total of 63 jurisdictions, which
include the United States, the United Kingdom, and Singapore.48 It should be noted that some
countries who have implemented it may have established exceptions to it and may demand
mutual exchange. Undoubtedly, although the Code allows the government to establish treaties
to enforce the UNCITRAL Model Law, it is not feasible or practical to negotiate around 200
individual bilateral treaties within a limited timeframe. Moreover, this approach would add
unnecessary complexity, as the Indian courts would need to consider the specific details of
each treaty when dealing with cross-border insolvency cases. Undoubtedly, the most
corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal
arrangements have been made, shall be subject to such conditions as may be specified.
S. 235: Letter of request to a country outside India in certain cases.—(1) Notwithstanding anything contained in
this Code or any law for the time being in force if, in the course of insolvency resolution process, or liquidation
or bankruptcy proceedings, as the case may be, under this Code, the resolution professional, liquidator or
bankruptcy trustee, as the case may be, is of the opinion that assets of the corporate debtor or debtor, including a
personal guarantor of a corporate debtor, are situated in a country outside India with which reciprocal
arrangements have been made under section 234, he may make an application to the Adjudicating Authority that
evidence or action relating to such assets is required in connection with such process or proceeding.
(2) The Adjudicating Authority on receipt of an application under sub-section (1) and, on being satisfied that
evidence or action relating to assets under sub-section (1) is required in connection with insolvency resolution
process or liquidation or bankruptcy proceeding, may issue a letter of request to a court or an authority of such
country competent to deal with such request
47
Shikha Sharma Jaipuriar, Cross Border Insolvency in India - A New Regime in The Making, Manupatra (Mar.
18, 2024) https://articles.manupatra.com/article-details/CROSS-BORDER-INSOLVENCY-IN-INDIA-A-NEW-
REGIME-IN-THE-MAKING
48
United Nations Commission on International Trade Law,
https://uncitral.un.org/en/texts/insolvency/modellaw/cross-border_insolvency/status (last visited Mar. 18, 2024)
30
straightforward approach would be for India to promptly endorse and formally adopt the
UNCITRAL Model Law, subsequently integrating it into the Code.
Presently, the Code has two clauses aimed at facilitating resolution of cross-border insolvency
disputes:
• Agreements with foreign nations
Pursuant to Section 234 of the Code, the Central Government has the authority to
establish an agreement with another country's Government in order to enforce the
requirements of the Code. In addition, the Central Government has the authority to
instruct the implementation of the regulations stated in the Code about the assets or
property of a corporate debtor or an individual, including a personal guarantor of a
corporate debtor, that are located outside of India, through a mutual agreement.
• Letter of request
If there is a need for evidence or action about the assets of a company that owes money
and is located outside of India, the person in charge of resolving the company's financial
problems, whether it be the resolution professional, liquidator, or bankruptcy trustee, can
submit a request to the NCLT under Section 235 of the IBC. If the NCLT determines it
appropriate, it has the jurisdiction to send a formal request to a court or authority in a
nation that has a reciprocal agreement in place under Section 234 of the Code.
While Sections 234 and 235 were added to the law with the intention of aiding the resolution
of cross border insolvencies, it was noted that no measures had been taken to successfully
execute the intergovernmental agreements. Currently, foreign countries do not directly
acknowledge or enforce an NCLT order in a cross-border insolvency case.49 In addition, even
if informed, these regulations fail to sufficiently tackle the complex problems that arise from
cross-border insolvency proceedings.50
Today’s laws are not in place for resolving the international insolvency matters. In fact, the
laws are disorganised and distorted among several statutes that leads to further
complications.51 Though the revamping has been initiated with introduction of IBC in the year
49
Manshaa Nagpaal, Cross-Border Insolvency: India and the World, Taxmann (Mar. 18)
https://www.taxmann.com/research/ibc/top-story/105010000000023621/cross-border-insolvency-india-and-the-
world-experts-opinion
50
Id.
51
Mithilesh Kumar, Cross Border Insolvency: Indian Law Vis A Vis International Law: UNCITRAL Model,
MONDAQ (Mar. 18, 2024)
http://www.mondaq.com/india/x/257314/international+trade+investment/Cross+Border+Insolvency+Indian+La
w+Vis+A+Vis+International+Law+UNCITRAL+Model.
31
2016, which provides for restructuring a company undergoing insolvency proceedings, in a
time bound manner, rather than having focus on liquidation. Under IBC, the debt laden
company enters into an agreement with the committee of lenders. Additionally with the
assistance of insolvency resolution professional, bring in investors and support in consulting
creditors, negotiating the plan, seeking support from major creditors and ensuring that the
plan complies legally. Finally, the agreed plan is approved and implemented in accordance
with the insolvency law through the formal process. But the law is practically silent on cross-
border issues. Therefore, this chapter focuses on the existing laws in India and how they have
been rather irrelevant in comprehending the intricacies of international insolvency and the
inevitable disputes arising from it.
2.1 Statutes Governing Cross-Border Insolvency in India

The Constitution of India delineates certain classifications of matters which can be dealt by
both state and the Central Government have the authority to make laws. One distinctive
feature of the Constitution of India is that it grants the authority to both Central as well as the
State Government to pass legislation on particular areas covered in it. Insolvency and
Bankruptcy are specific areas in which both the state and central government can create
legislation.52 The following provisions are elaborated upon below:
Before proceeding to the landscape of the insolvency laws in India, it is pertinent to

understand their origin. The century old statutes i.e. the Presidency Town Insolvency Act
1909 and the Provincial Insolvency Act 1920 are the two statues that are still dealing with
insolvency of individuals or partnerships. Enacted over a century ago, under the British
regime, these are severely out dated laws and consequently inadequate to address the
emerging complications of international insolvency, which is a relatively new phenomenon.53
Post-independence, the economic and political landscape led to phenomenal lending at
subsidised rates to boost industrial development, thereby lacking focus on efficient
bankruptcy system.54
The IDR Act, empowered Central Government to take over the control and management of
the companies in liquidation.55 This Act was much before privatization policy therefore
liquidation proceedings aligned with the primary objective of the Act i.e. policy of industrial
52
Supra Note 43.
53
Supra Note 25.
54
Id.
55
Industries Development and Regulation Act of India, 1951 §18FA, No. 65, Acts of Parliament, 1951 (India)
32
licensing and government control.
Eventually the primary corporate statute, the Companies Act was enacted in the year 1956.
This statute provided for three categories of proceedings for winding up a company i.e. (i)
voluntarily winding up wither by members or creditors; (ii) compulsory winding by court and
(iii) winding up subject to court supervision. Section 433 of the 1956 Act clearly stipulates
that a company that is unable to fulfil its obligations towards outstanding debts maybe wound
up by the Court or Tribunal. Notably, as far as winding up proceedings are concerned, foreign
and domestic creditors are not differentiated, and therefore the “does not discriminate against
debts due to foreign creditors”. Even the apex court affirmed that foreign creditors must be
permitted to substantiate their claim in liquidation proceedings in India against an
unregistered company.56
Further, to wind up a foreign company it must be treated as an unregistered company.57 It has

been held in plethora of judgments that winding up order against a foreign company fall is
within the jurisdiction of courts irrespective of the members, provided it has assets and a
“place of business” in India.58 Even if a court with proper authority at the company's place of
registration has issued an order to dissolve the company, it would have no impact. Indian
judges are not obligated to consider winding-up proceedings solely based on a winding-up
order issued by a foreign company's home court. On practical considerations, the court may
refuse to exercise jurisdiction.59 Another important aspect dealt under 1956 Act was the
prohibition of concurrent proceedings. The commencement other legal proceeding or any suit
against a company undergoing liquidation for enforcement of debt was not possible without
the leave of the Court.60
From the above discussion it is evident that 1956 Act did provide insolvency framework for
contingencies that occur in jurisdictions outside India, however, the relief against a foreign
company is very limited i.e. to the extent of assets situated in India. Moreover, no relief is
provided for foreign assets of Indian companies. Thereafter, the revival and rehabilitation of
sick companies was attempted under the SICA Act, which though was the central law
governing corporate rescue but it was only applicable to industrial companies.
56
Raja of Vizianagaram v. Official Receiver, AIR 1962 SC 500.
57
Under Chapter X of the Companies Act, 1956.
58
Section 583(2) of the Companies Act 1956.
59
In Re Travancore National Bank Ltd., 1939 Mad. 318
60
Section 446 of the Companies Act 1956
33
It was only after 1990s liberalization, privatization and globalisation policies that foreign
investment was welcomed in India. As multinational corporations started to trend in Indian
market, the need of a reformed legal framework was felt. This led to the constitution of DRTs
under the RDDBFI 1993. But the focal point remained recovery of debts due to banks and
notified financial institutions, which was the major downside of this Act. Therefore,
individuals and corporations could not obtain any relief under this statute.61 This statute had
another glaring issue. The applications under this law could only be made by the creditors and
not by any SPVs for securitization, which is designed to save the company through
investments, which leads to the implementation of conventional yet lengthy foreclosure
techniques on these organisations.62
Faster economic growth also triggered an increase in bad loans and non-performing assets,
and in the year 2002 the government introduced the SARFAESI Act to authorize secured
creditors to enforce receivable loans by attaching or selling security (both movable and
immovable property), etc., without court intervention. In Transcore Vs. Union of India63 the
Supreme Court upheld the concept of complete autonomy of specified creditors and lenders
for classification of asset and recovery of outstanding dues. However, this was merely a debt
recovery procedure rather than a solution to insolvency let alone international insolvency.
Even in the Companies (Amendment) Act, 2002 made in lines with the recommendations of
the ‘Justice Eradi Committee’ did not incorporate the suggestions with regard to adoption of
Model Law. 64 The position was not altered much, with respect to foreign companies winding
up, even after introduction of Companies Act 2013.
This being said, the principle of comity has always been followed by Indian Courts under the
CPC.65 The Central Government has designated several countries, including the
Commonwealth members, as reciprocating territories.66 However, the provisions of CPC only
deal with recognition of foreign judgments and not the on-going proceedings. Therefore, at
every instance a foreign creditor must get a decree from foreign Court and initiate separate
61
Interim Report of The Bankruptcy Law Reform Committee issued on February 2015,
https://www.finmin.nic.in/sites/default/files/Interim_Report_BLRC_0.pdf at p. 10
62
Supra Note 25, at 1050.
63
AIR 2007 SUPREME COURT 712
64
Justice Eradi Committee Report
65
Section 13, 44A of Code of Civil Procedure, 1908
66
Ankoosh Mehta, Kriti Srivastava & King Dungerwal, United Arab Emirates: Reciprocating Country under
Indian Laws, Cyril Amarchand Blogs, (Mar. 18, 2024)
https://corporate.cyrilamarchandblogs.com/2020/10/united-arab-emirates-reciprocating-country-under-indian-
laws/
34
proceedings under Indian Law for recognition and enforcement. However, if the company's
assets are located beyond the jurisdiction of India, the liquidator and the Indian courts will
need to seek approval from the courts in that jurisdiction in order for their acts to have legal
effect. To quote Mitra Committee’s observation on inefficiency of legal framework in India
on this subject:
“In two regards Indian law on insolvency is out-dated. Firstly, Indian law is not comparable
to the standard set in international legal requirement and as such stands apart and alone.
Secondly, Indian law has not taken into consideration of any cross- border relation.”67
In view thereof, India is in dire need to revamp its insolvency law in order to come at par with
the international standards.
2.2 Challenges in the Current Framework

Although the Code has provided detailed explanations for insolvency resolution and
bankruptcy of corporate entities, individuals, and partnership businesses, it has not
specifically addressed matters and provisions pertaining to Cross Border Insolvency. India
must adopt a robust framework to address the deficiencies in the current system and
effectively tackle the challenges of Cross Border Insolvency. Several difficulties arise from
these provisions:
Including a clause to establish mutual agreements with other countries presents several
challenges, rendering it insufficient for successfully addressing the transnational issue. These
agreements need a significant amount of time for negotiation, making them lengthy and
hence, not deemed practical. Each agreement differs due to the diverse range of laws, and
each country has the option to include different provisions in their bilateral agreements. This
leads to legal and procedural complexities and fragmentation of the system, often resulting in
conflicts and increased administrative workload. Moreover, the code does not provide a clear
and specific mechanism for establishing reciprocal arrangements for the purpose of carrying
out insolvency proceedings.68
Section 235 allows for a letter of request to be sent to a foreign authority in order to get
evidence. However, it does not include any explicit requirements regarding how the local and
67
N.L. Mitra Committee Report at pg.36
68
Palak Jain, Lacuna in the Insolvency & Bankruptcy Code, 2016 to deal with Cross Border Insolvency, IBC
Laws, (Mar. 18, 2024) https://ibclaw.in/lacuna-in-the-insolvency-bankruptcy-code-2016-to-deal-with-cross-
border-insolvencyby-palak-jain/,
35
foreign authorities should cooperate or coordinate their proceedings. Hence, relying just on
the letter of request can lead to an unwarranted and avoidable delay, since there is no
established system for collaboration and coordination between local and foreign authorities.
Creditors consider this issue to be of significant importance.
The inclusion of section 44 of the CPC exacerbates the existing insufficiency. The clause does
not explicitly address the enforcement of orders pertaining to Cross-Border Insolvency
procedures. The courts have provided varying interpretations when analysing foreign
judgements. It is restricted to carrying out court orders, but does not encompass participation
in legal procedures or coordination amongst the Insolvency Professionals or the courts, that is
essential in a Cross Border Insolvency issue. Thus far, there has been no instance where an
insolvency case/order has been requested to be acknowledged as a foreign court judgement
that can be enforced as a foreign verdict. In contrast, while courts have the authority to
enforce these orders, insolvency experts are also granted the right to make such decisions in
insolvency proceedings.69
Furthermore, the worldwide pandemic has highlighted the necessity for strong and resilient
Cross Border Insolvency rules. The stagnation of economies has led to widespread
insolvency. There is a possibility that numerous Multinational Enterprises may be compelled
to undergo insolvency resolution proceedings. Consequently, due to the ongoing disruption
caused by COVID-19. The present insolvency system must demonstrate maturity in response
to this unprecedented situation.
Foreign assets held through intricate corporate structures in tax havens pose a formidable
challenge in cross-border insolvency cases. The recent cases of Videocon Oil and Firestar.
International (owned by Nirav Modi) exemplify this predicament. Tax jurisdictions like the
Cayman Islands, British Virgin Islands, and Delaware in the United States can significantly
impede cross-border insolvency proceedings due to the complexity of litigation and asset
tracing.70
In essence, the existence of foreign assets held through complex webs of entities in tax havens
presents significant challenges in terms of asset identification, legal control, and
comprehensive resolution during cross-border insolvency proceedings. Overcoming these
69
Supra Note 35.
70
Alekh Shah, How tax havens act as hurdles in cross-border insolvency laws ETCFO, (Mar. 18, 2024)
https://cfo.economictimes.indiatimes.com/news/explained-how-tax-havens-can-act-as-hurdle-in-cross-border-
insolvency-laws/89419188
36
hurdles may require enhanced international cooperation, robust information-sharing
mechanisms, and stringent regulatory frameworks to ensure transparency and effective
resolution of such cases.
37
CHAPTER III: COMPARATIVE ANALYSIS AND
INTERNATIONAL OVERVIEW
This chapter delves into a comparative examination of cross-border insolvency regimes,

focusing primarily on the United States and the United Kingdom. These two nations have
established legal frameworks and precedents that significantly influence the global landscape
of insolvency proceedings involving multiple jurisdictions. Additionally, this chapter will
provide a brief overview of other countries' regimes, highlighting notable features and
developments in the ever-evolving field of international insolvency law.
3.1 Comparative Analysis – UK And USA
3.1.1 United Kingdom

Great Britain implemented the Cross Border Insolvency Regulations 2006, which is their
version of the UNCITRAL Model. The objective was to fully embrace the Model Law as it
was written. The regulatory framework in English law consists of:
3.1.1.1 The EC Regulation on Insolvency Proceedings

The EU Council Regulation on Insolvency Procedures, 2000, was adopted on May 2, 2000,
and came into effect on May 31, 2002.71 It is directly applicable throughout the EU, covering
collective insolvency proceedings such as compulsory liquidation, administration, creditors'
voluntary winding up, voluntary arrangements, and personal bankruptcy. The regulation
specifies three types of proceedings: main, secondary, and territorial. The main proceeding
occurs in the Member State where the debtor has its "Centre of Main Interest." Secondary
proceedings occur in one Member State and in another, while territorial proceedings occur in
limited circumstances. The liquidator has a restricted right to oversee the main proceeding and
move assets from a foreign Member State.
However, this regulation has now been repealed by The EU Regulation on Insolvency
Proceedings(recast).72 On December 12, 2012, the Commission adopted a report regarding
the implementation of Council Regulation. The report determined that the Regulation is
generally functioning effectively. However, it is recommended to enhance the application of
71
EUR-Lex, https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A32000R1346 (Last visited Mar.
18, 2024)
72
EUR-Lex, https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32015R0848 (Last visited Mar.
18, 2024)
38
specific sections in order to improve the administration of cross-border bankruptcy
procedures. Due to multiple amendments and upcoming changes, it is necessary to recast the
Regulation for the sake of clarity.
3.1.1.2 The Cross-Border Insolvency Regulations, 2006

CBIR73 are a set of laws that regulate the process of insolvency across different countries. The
text delineates two categories of legal processes: foreign main proceedings, which occur when
the debtor's primary centre of interest is located, and foreign non-main proceedings, which
occur when the debtor's establishment is located. These phrases have resemblance to the
primary proceeding and secondary proceeding as defined in the EC Regulation. Contrary to
the EC Regulation, CBIR only becomes applicable in the UK after overseas proceedings are
officially recognised. The case of In re Namirei-Showa Co. Ltd74 established the recognition
of a foreign main proceeding, with the UK High Court of Justice acknowledging it as such.
3.1.1.3 Insolvency Act, 1986

According to Section 426 of the UK Insolvency Act, 1986,75 nations that have been
designated, such as Australia, have the ability to request assistance from UK courts in
insolvency proceedings by submitting a letter of request. While the courts have the authority
to exercise discretion, they must do so in a sensible manner. Unless there is a compelling
reason to deviate from this principle, the courts are generally obligated to grant the requested
assistance. Main proceedings in the United Kingdom refer to legal processes that have a broad
scope and cover all of the debtor's assets, regardless of their location. If the debtor has an
actual physical presence, to deter "establishment," in a particular Member State, but their
main operations and decision-making are based in a different Member State, then insolvency
process can be started in the country where the debtor owns an establishment.
When secondary procedures are initiated after the main proceedings, they are referred to as
"secondary proceedings". Conversely, when territorial proceedings are initiated before the
main proceedings, they are referred to as "territorial proceedings". Section 426 of the
Insolvency Act, 1986 requires UK courts to provide assistance to courts of "relevant
countries" that are seeking help. This can be accomplished by granting abroad office holders
the ability to utilise UK insolvency rules or by implementing local insolvency legislation.
Nevertheless, this provision has a restricted scope as it solely pertains to requests filed by
73
The Cross-Border Insolvency Regulations, Act No. 1030 of 2006.
74
High Ct (Ch) 16 October 2008, 7542/08, CLOUT 1004
75
The Insolvency Act, 1986 Chapter 45
39
insolvency courts of "relevant countries," predominantly Commonwealth countries or
surviving U.K. colonies.
According to the EC Regulation, it is generally assumed that the debtor company's registered
office is its COMI. However, this presumption can be challenged if there is evidence to the
contrary. Unfortunately, the EC Regulation does not specify what would be considered
appropriate evidence in such cases. According to Article 3 of the rule, the centre of principal
interests refers to the location where the debtor regularly manages their interests and may be
identified by other parties.
The deal between the United Kingdom and the European Union has triggered a transition
phase that will conclude on January 31, 2020. During this duration, the United Kingdom
continues to be bound by the EU customs union, while no longer being a member of the EU's
political structures. The existing law in the European Union lacks a coherent framework and
is influenced by the internal rules of Member States as well as the Regulation. The UK will no
longer have any additional influence in the formulation of this legislation. The legislative
framework for insolvency procedures in the UK will be determined through talks with the
European Union and other Member States.76
3.1.2 United States of America

As liberalization started to dominate world economy during late 20th century, the massive
volumes of trade and commerce created concerns among international organizations and
developed countries. At this point alignment of economic laws (be it laws relating to
intellectual property, arbitration, electronic commerce or cross border insolvency) was
becoming inevitable. As UNCITRAL undertook the work to harmonize laws regarding
international insolvency, scholars and academicians of United States of America started
deliberating different approaches to solve cross border issues.
As early as 1997, when the Bankruptcy Act was first drafted, the U.S. National Bankruptcy
Review Commission had recommended adoption of Model Law.77 Interestingly, USA did not
rush to adopt the model law immediately after its publication in 1997, it adopted it in 2005
76
Rebecca Oliver, Impact of Brexit on insolvency, Norton Rose Fulbright, (Mar. 18, 2024)
https://www.nortonrosefulbright.com/en/knowledge/publications/fc0fb698/impact-of-brexit-on-insolvency
77
The National Bankruptcy Review Commission is an independent commission established pursuant to the
Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, 108 Stat. 4106.
40
some eight later.78 US took time to adopt the Model law meanwhile taking cue from non-
governmental legislations for a phased transformation. The non-statutory guidelines namely
‘Principles of the Law, Transnational Insolvency’ developed by the American Law Institute
played a crucial role in progression of US cross border insolvency laws. The principles were
developed for co-operation among the countries of NAFTA; however, they serve as
explanatory guide on issues surrounding cross-border insolvency that are ambiguous under
the current legal regime.79 The imbedded principles of recognition and comity covered both
the traditional liquidation type procedures provided under Chapter 7 of the US Bankruptcy
Code and restructuring proceedings found in Chapter 11 of the Bankruptcy Code80. Although
the US Bankruptcy laws former to adoption of Model Law, did provide for co-ordination with
foreign representatives and cooperation with foreign jurisdictions but they were wholly
discretionary and were considered insufficient.
Finally, in the year 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act
(hereinafter referred to as the Bankruptcy Act or Chapter 15)81 was amended to include an
exclusively new Chapter 15 that was to deal with corporate reorganisations, and in particular,
transnational insolvencies and restructurings. The US has adopted model law to set an
example however condemns the action on the ground of foregoing sovereign rights i.e.
placing international law at a higher pedestal than the domestic law.
Although some authors claim USA has adopted the Model Law in letter and spirit, i.e. without
many deviations therefore honouring its commitment to universalism82, then there are others
who argue that “the legislative intent in the US does appear to have been to stay loyal to the
spirit of the Model Law, the legislative record also indicates significant rewriting to ‘comport
with US procedural terminology”83. However, to understand the different spectrum of
opinions, the practical issues regarding the application of the Bankruptcy Law vis-à-vis the
interpretation of Model law accorded in US has been discussed in detail below.
78
Supra Note 30 at 4.
79
Parry, R., and Gao, N., The Future Direction of China's Cross‐border Insolvency Laws, Related Issues and
Potential Problems. Int. Insolv. Rev., 27: 5–31 (2018).
https://irep.ntu.ac.uk/id/eprint/32102/1/PubSub9596_Parry.pdf
80
Section 101(23) of the US Bankruptcy Code
81
Title 11 of the United States Code (the Bankruptcy Code)
82
John J. Chung, ‘The New Chapter 15 of the Bankruptcy Code: A Step toward Erosion of National
Sovereignty’, 27 Nw. J. Int'l L. & Bus. 89 (2006)
https://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1643&context=njilb
83
McCormack, G US exceptionalism and UK localism? Cross-Border Insolvency Law in Comparative
Perspective. Legal Studies, 36 (1). pp. 136-162. (2016)
https://eprints.whiterose.ac.uk/87076/3/Americanexceptionalismandlocalism[1].pdf
41
Going forward, a petition under pursuant to Section 1515 of the Bankruptcy Act can be filed
by a foreign representative for recognition of foreign proceedings. Such recognition is central
to the proceedings as non-recognition would render the debtor jurisdictionally incapable from
seeking relief or any form of cooperation from courts or the State. Though prima facie it
seems to be a direct and uncomplicated provision but practically obtaining relief under this
provision has been quite arduous.84
It is notable that the definitions of Chapter 15 especially “foreign main proceeding” and
“foreign non-main proceeding” have been adopted virtually verbatim from the Model Law.
Chapter 15 defines “foreign main proceeding” to mean “a foreign proceeding pending in the
country where the debtor has the centre of its main interests” and a “foreign non-main
proceeding” to mean “a foreign proceeding, other than a foreign main proceeding, pending in
a country where the debtor has an establishment.”85 Consequently, the concept of centre of
main interests holds importance under the Bankruptcy Act.
Chapter 15 of the U.S. Bankruptcy Code includes the Model Law. The US bankruptcy court
was tasked with determining the status of a certain overseas proceeding as either main or non-
main. The court observed that Chapter 15 did not provide a definition for COMI. Therefore,
the court analysed the definition in relation to the EU laws, which originated the idea of
COMI. The US bankruptcy court recognised and sanctioned the ruling of the Irish Supreme
Court regarding the debtor's centre of main interests (COMI). The court acknowledged that
the presumption that a debtor's Centre of Main Interests (COMI) is in the same place as its
registered office could be contested and refuted.
US courts have also turned to foreign judgements especially of the European Union to
interpret the provisions of Chapter 15. For instance, the case of In re Tri-Continental
Exchange Ltd86 The bankruptcy court in the US was tasked with determining the
classification of a certain overseas proceeding as either main or non-main. The court analysed
the definition of COMI under the EU laws, as Chapter 15 lacked a clear definition. The US
liquidation court needed to decide if a specific foreign proceeding continuing was principle or
non-primary. Noting that Section 15 failed to define COMI, the court examined the term
provided in the EU guidelines. The US court observed that the EU classified the COMI as:
“where the borrower leads the organization of his interests all the time and is accordingly
84
Megan R. O'Flynn, ‘The Scorecard so Far: Emerging Issues in Cross-Border Insolvencies Under Chapter 15
of the U.S. Bankruptcy Code, 32 Nw. J. Int'l L. & Bus. 391 (2012)
http://scholarlycommons.law.northwestern.edu/njilb/vol32/iss2/5
85
11 U.S.C. section 1502(4)–(5) (2006).
86
349 B.R. 627 (Bankr. E.D. Calif. 2006)
42
ascertainable by outsiders”. Embracing this standard, the US court at that point found that the
procedure in the nation where the account holder had its key office and essential
centralization of representatives was the COMI of the borrower. To conclude on this point, we
can say that jurisprudence developed in US with regard to determination of ‘COMI’ for main
insolvency proceedings are persuasive for other jurisdictions that propose to adopt the Model
Law.
Under the previous provisions regarding transnational bankruptcy dealt with under section
304, chapter 11, the courts are given expansive prudence to recognize the cases subsidiary or
ancillary with the overseas insolvency petitions, dependable on, the equitable treatment of all
classes of creditors and the established standards of comity. All said and done, considering
only from the perspective of an insolvency setting, comity can be seen as most suitable where
foreign “proceedings do not violate the laws or public policy of the United States, and if the
foreign court abides by fundamental standards of procedural fairness.”87 According to section
304, the court has the power to deny aid if it is based only on the principle of comity.
By incorporating the UNCITRAL's collaborative international norms, which include the
obligatory acknowledgment of foreign primary processes, Chapter 15 also implemented
Article 6 of the Model Law word by word. Section 1506 stipulates“Nothing in this chapter
prevents the court from refusing to take an action governed by this chapter if the action would
be manifestly contrary to the public policy of the United States.”
3.2 International Overview

To gain a better perspective on the working of the Model Law, this chapter seeks to analyse
the implementation and enforcement of cross border insolvency law enacted in various
countries, and primarily between UK and USA. Primary purpose of this section is to
understand the implications of modifications made while adopting Model Law by the
aforesaid countries.
3.2.1 Singapore
Singapore implemented the model law in 2017.88 In Singapore, recognition of foreign
insolvency proceedings is considered a procedural need. Provided that the foreign
representative makes an application in the appropriate manner, recognition will be
automatically granted. According to the Model Law, a representative from another country
87
Finanz AG Zurich v. Banco Economico S.A., 192 F.3d 240, 246 (2d Cir.1999).
88
UN Information Service Vienna, https://unis.unvienna.org/unis/en/pressrels/2017/unisl243.html (Last visited
Mar. 18, 2024)
43
has the ability to request recognition of foreign bankruptcy proceedings from the Singapore
High Court. The application should contain an authorised document of the order that started
the insolvency process and that had the foreign representative appointed. Additionally, it
should include a list that lists all the insolvency proceedings related to debtor which has got to
the notice of the foreign representative.
Singapore has adopted the Model Law with the aim of establishing itself as the COMI for
businesses. This is expected to attract more foreign investments and position Singapore as a
hub for insolvency administration and restructuring. The ultimate goal is to reduce the
expenses associated with insolvency proceedings and enhance the recovery of assets for
creditors.89
3.2.2 New Zealand

While New Zealand has implemented the UNICTRAL Model Law, it has made few
modifications to its current legislation. The Schedule I of the Insolvency (Cross-Border) Act
2006 has been revised to grant additional authority to the country's High Courts in order to
facilitate collaboration with foreign courts in cross-border insolvency cases. According to the
Companies Act 1993 of New Zealand, the country's High Courts have the authority to start
liquidation proceedings for a foreign company.90 This can happen if there is an application for
it, and the application does not depend on whether the company has any or all of its assets in
New Zealand.91
3.2.3 Japan
Japan implemented the UNICTRAL 1997 Model Law of Cross-Border Insolvency by passing
and enforcing the 'Law on Recognition of and Assistance for Foreign Insolvency Proceedings
(The Recognition Law).92 This law was initially presented to the Legislature in the 1990s and
was later amended in 2006. This was mostly launched following the release of proposals by
the Bankruptcy Law Committee in 1996. The purpose of this action was to implement
changes in both individual and corporate insolvency cases that occur across borders, with a
89
Varendyam Jahnawi Tiwari, Efficacy of I.B.C. In Light Of Absence Of The Cross-border Insolvency Regime: A
Critical Comparison of The United States, The United Kingdom And Singapore Approach To The Model Law,
Vol. 5 No. 2, RFMLR, 38, 49-50, (2018)
https://docs.wixstatic.com/ugd/0fa0b3_fd4c67e2d2154c179fcb97a211617a2a.pdf?index=true
90
S. 342 of New Zealand Companies Act, 1993
https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM322879.html
91
Id.
92
Act No. 129 of 2000
44
specific emphasis on the rehabilitation aspects. Japan unequivocally differentiates between its
domestic laws and laws pertaining to international procedures.93
Contrary to popular belief, Japan's reputation for being ahead of its time and quick to adapt to
developments is not entirely accurate. Japan has not yet adopted certain important provisions
of the UNICTRAL 1997 Cross-Border Insolvency Law. These provisions include procedures
for implementing an automatic stay order, specific regulations for recognising foreign
proceedings, and laws allowing for changes or modifications in court-related
communications.94
Japanese Recognition law inserted several conditions which do not find a place in Model
Law. Some of them have been enlisted below:
a) Prepayment of cost of recognition proceedings. However, the cost is not specified
under the Recognition law and therefore the court must decide upon it.95
b) Appointment of local representative to appear and assist the court on behalf of the
foreign trustee or representative.96 The reason of such insertion could be the language
barrier of courts of Japan. However, needless to say, this amounts to additional cost
and further complications.
c) if court is of the view that a petition for recognition has been manifestly filed in bad
faith by the foreign representative.97
Perhaps, one view could be that since the Model Law has been framed on the principles of
common law poses a challenge for civil law countries like Japan to accept it in letter and
spirit.
3.2.4 South Korea

South Korea has implemented a new and comprehensive bankruptcy law known as the
DRBA, which came into effect in 2006.98 The text provides a comprehensive outline of the
steps involved in conducting a foreign or cross-border insolvency process, as outlined in
Article 629. Additionally, Article 636 details the ways in which a country can support and
93
Hideo Horikoshi, Guide to Japanese Cross-Border Insolvency Law, 9 LAW & BUS. REV. AM. 725 (2003)
https://scholar.smu.edu/lbra/vol9/iss4/5
94
Id.
95
Article 20 of the Recognition Law.
96
Article 17 para 4 of the Recognition Law.
97
Article 21 para. 6 of Recognition Law
98
Debtor Rehabilitation and Bankruptcy Act, 2005
https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=46315&type=new&key=
45
collaborate in foreign insolvency proceedings to safeguard the debtor's business or the
creditors' assets, depending on the specific circumstances.
An advanced law implemented in South Korea is the elimination of the concept of

'territorialism' in its legal system. This means that any legal proceeding, regardless of whether
it is related to insolvency or not, will have implications that extend beyond the country's
borders. In other words, the effects of such proceedings will also be applicable in foreign
countries, and vice versa. The principle of eradication of territorialism is outlined in Chapter
V of the DRBA, and it emphasises the need for stringent application in explicit words.
46
CHAPTER IV: THE NEED FOR CROSS BORDER
INSOLVENCY MODEL LAW
In 2016, India approved a new IBC Code. This code is a complete framework for managing
insolvency and bankruptcy matters in the country. Previously, the country had a fragmented
set of regulations regulating the dissolution or reestablishment of companies, which were
complex and hence not fully utilised.99 Specifically, the administration aimed to enhance the
country's insolvency system in order to boost its Ease of doing business rankings index, a goal
it promptly achieved. Additional incentives for implementing the Code were driven by the
perceived necessity to bolster the growth of local credit markets as a whole. As planned, the
introduction of IBC promptly resulted in a substantial increase in the number of cases
compared to the prior systems. Additionally, with some guidance from the Reserve Bank of
India, numerous notable cases were also included.100
During the COVID-19 pandemic, we have observed directly how interconnected and
inseparably linked global trade and commerce are. A shift in production strategies by a few
companies in China and Taiwan has led to a worldwide shortage of chips, resulting in
significant financial losses for vehicle manufacturing companies.101 Globalisation has led to a
significant rise in transnational commercial activity in recent decades. This poses a challenge
for MNCs that often have intricate structures involving subsidiaries and holdings in multiple
jurisdictions. These structures involve creditors from different countries and assets spread
across the world. Given the prevalence of these issues in today's business landscape, it is
crucial to establish a strong and comprehensive system for dealing with insolvency across
borders. This will, in turn, facilitate an increase in FDI and enhance investor trust in our
nation. India's increasing integration with the global economic and financial systems has led
to the presence of several Indian enterprises with assets and operations outside, as well as
foreign investors and creditors.
India's new Code received attention and was subject to criticism and worry due to the
omission of provisions to handle international aspect of these cases that may emerge under
99
Supra Note 13
100
Press Release, Reserve Bank of India, RBI identifies Accounts for Reference by Banks under the Insolvency
and Bankruptcy Code (IBC) (2017), https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=40743
101
Frieske, B.; Stieler, S. The “Semiconductor Crisis” as a Result of the COVID-19 Pandemic and Impacts on
the Automotive Industry and Its Supply Chains. World Electr. Veh. J., 13, 189 (2022)
https://doi.org/10.3390/wevj13100189
47
IBC.102 Policymakers in the region had long recognised the necessity for a framework like the
IBC even prior to its approval. Twenty-two years ago, the Reserve Bank of India established
an influential advisory committee on bankruptcy reform, led by Dr. N.L. Mitra.103 The
committee proposed that, our country must adopt the UNCITRAL’s model law. The Indian
Parliament and the prominent personalities deliberated on the possibility of adopting the
UNCITRAL model law, but ultimately chose not to do so.104
Currently, both domestic banks and foreign banks that have a significant global presence
typically meet the trade finance requirements of both MSMEs and major corporations
involved in importing and exporting. Domestic banks that have a significant presence abroad
through bank branches, overseas subsidiaries, and representative offices have a greater
proportion of approved trade credit. Furthermore, with the growing interconnections in the
financial industry, the funding requirements will also be fulfilled through global resources. As
international trade expands, domestic enterprises will become integrated into global value
chains, making them vulnerable to external forces. Bankruptcy and insolvencies involving
cross-border proceedings are likely to be unavoidable, necessitating India to implement a
globally acknowledged framework that can adeptly tackle the complex challenges that may
emerge with respect to nations of substantial economic significance to us.
Implicit in the potential for expansion are also the risks of failures and insolvencies that
involve international aspects. This possibility will be unavoidable, and India's insolvency
process necessitates cross-border components that can handle the intricacies that may arise in
such instances. Considering the clear increase in cross-border cases and the associated
dangers, it is now crucial to establish a legal cross-border insolvency framework. The
implementation of a cross-border insolvency law in India will enhance India's reputation as a
highly enhanced jurisdiction for resolving insolvency cases. Global investors and
sophisticated countries will perceive it as a progressive and forward-looking market change.
The adoption of the Model Law by certain jurisdictions will facilitate the accessibility and
acknowledgment of Indian proceedings through a structured framework. The extensive and
rapid adoption of the Model Law by significant jurisdictions such as the United States of
America, United Kingdom, Japan, Singapore, Brazil, South Africa, and Mauritius, serves as a
solid foundation for its adoption by India. India can modify and adjust the Model Law to meet
the specific needs of its jurisdiction.
102
Sumant Batra, Corporate Insolvency: Law and Practice, 580 EBC LUCKNOW (2017)
103
Dr. N.L. Mitra, supra note 11.
104
Report of the Joint Committee on the Insolvency and Bankruptcy Code, Lᴏᴋ Sᴀʙʜᴀ 43,44 (Apr. 28, 2016),
https://ibbi.gov.in/uploads/resources/16_Joint_Committee_on_Insolvency_and_ Bankruptcy_Code_2015_1.pdf.
48
4.1 Overview of The UNCITRAL Model Law on Cross-Border Insolvency
The United Nations introduced the Model Law in response to the urgent need for strategies to
address Cross Border Insolvency. During the Congress on International Trade Law in May
1992 in New York, governments suggested that the UNCITRAL should explore the
possibility of addressing the international dimensions of bankruptcy. The work that began in
1992 eventually resulted in the acceptance of the Model Law on Cross-Border Insolvency on
May 30, 1997.105 The Commission's Working Group on Insolvency Law is now addressing
the challenges related to cross-border insolvencies of multinational firms. The Model Law
provides legislative direction for governments, distinguishing it from other multilateral
accords. The declared purpose of the law is to help governments update their insolvency laws
with a contemporary, unified, and equitable framework to more effectively handle cases of
cross-border insolvency. The primary goal is to promote collaboration and coordination
across countries, rather than striving for unification, while also acknowledging and respecting
the variations in national legislation.
The Model Law offers a general structure, allowing each jurisdiction to make decisions
regarding the specific details and does not propose any method to resolve differences in
approaches among countries that have adopted the Model Laws. The Model Law is founded
upon four fundamental principles106:
1. Access - granting foreign insolvency experts and foreign creditors the right to directly
approach domestic courts in order to initiate insolvency proceedings against a debtor.
2. Recognition - to acknowledge foreign proceedings and offer appropriate solutions for
domestic insolvency processes if required.
3. Collaboration - to facilitate collaboration between local and foreign courts,
encompassing processes that are not acknowledged as either primary or secondary.
4. Cooperation - to facilitate the cooperation of countries engaged in simultaneous
insolvency proceedings.
One of the most important features incorporated in Model Law, with a view to satisfy
sovereignty is the public policy exception. Therefore, an enacting country under Article 6 of
105
Tripti Pandey & Deeba Faryal, International Comparative Analysis of Cross Border Insolvency, Vol. 6 Iss 5;
IJLMH, 986, 988-989 (2023) https://www.ijlmh.com/wp-content/uploads/International-Comparative-Analysis-
of-Cross-Border-Insolvency.pdf
106
United Nations Commission On International Trade Law,
https://uncitral.un.org/en/texts/insolvency/modellaw/cross-
border_insolvency#:~:text=The%20Model%20Law%20focuses%20on,relief%20(assistance)%20and%20cooper
ation. (last visited Mar. 18, 2024)
49
the Model Law, reject the application for recognition or refuse to grant any relief sought, if it
is found to be manifestly against the public policy of the state. However, it has often been
argued that in absence of any standard for applying public policy exception, could in fact
obstruct the applicability of Model Law.
A diverse range of countries have implemented the Model Law. The group consists of
established economies such as the UK, USA, Canada, Australia, New Zealand, Japan, and
Singapore, as well as tiny developing countries like Chad, Chile, Congo, Togo, Myanmar, and
Uganda.107
The Model Law categorises procedures into two types: foreign main proceedings and foreign
non-main proceedings. Simply put, a foreign main proceeding starts in the State where the
debtor has their COMI, which is the place where the debtor manages their business as
acknowledged by others. On the other hand, a foreign non-main proceeding occurs in a place
where the debtor has an 'establishment', which refers to any location where the debtor
conducts ongoing economic activity.108
Once accepted, the Model Law offers numerous advantages. Some of the advantages of doing
business in a state include the ease of doing business, which makes it an attractive investment
destination for foreign creditors. This is due to the increased certainty about insolvency
processes in case something goes wrong. The Model Law is intentionally meant to be
adaptable and to acknowledge the variations that exist across different countries' insolvency
laws. The protection of a state's domestic interest effectively safeguards against the potential
misuse of legislation by any individual, resulting in limited danger. It gives higher importance
to domestic insolvency procedures compared to foreign proceedings.
4.2 Draft ‘PART Z’
The MCA of the Government of India has recently introduced a draft provision known as the
Cross-Border Insolvency Chapter.109 These recommendations primarily utilise the
UNCITRAL Model Law to facilitate the enforcement of rights by both international and local
creditors over the assets of corporate debtors located abroad. They also aim to acknowledge
foreign insolvency processes in India. The Working Group on Insolvency presented the
107
Supra Note 48.
108
Supra Note 27.
109
Ministry of Corporate Affairs, https://www.mca.gov.in/Ministry/pdf/PublicNoiceCrossBorder_20062018.pdf
(Last visited Mar. 18, 2024)
50
finished language during the 1997 UNCITRAL annual conference. The Commission has
approved the production of a Guide to Enactment of the UNCITRAL Model Law on Cross-
Border Insolvency, which is closely related to the Model Law.
After acknowledging the imperative of enacting the Model Law for cross-border insolvency,
endeavours were undertaken to integrate its provisions into the Indian legal framework. This
led to the development of Draft Part Z subordinate legislation, which was suggested by the
CBIRC.
The proposed Part Z comprises a collection of proposed recommendations that focus on a

particular chapter. The objective is to tackle the shortcomings of the existing cross-border
insolvency process, or its absence altogether. The draft is based on the Model Law, often
known as MLCBI. The ILC recommended the Draft guidelines in its Report submitted on
16.10.2018.
4.2.1 Distinction Between the Proposed Draft Part Z And UNCITRAL Model
Law.
The Draft part Z is predominantly based on the UNCITRAL Model Law, however there are
few minute differences between them:
1. The newly proposed pre-packaged insolvency for MSMEs will be excluded from the
ambit of draft part z, this is being done to protect the interests of MSMEs, as they are a
vital back bone for our country and its economy.
2. Exclusion of important financial institutions like banks and insurance companies is
also beings ought as a protective measure.
3. A suggestion has been made by the Insolvency Law Committee, to include Legislative
Reciprocity in the Indian adoption of Model law, the term reciprocity is absent in the
Model law and it is touted that the reason for the same is to ensure wider adoption of
the model law by giving the nation states the lenience to choose which kind of
reciprocity they would prefer either legislative or substantive. The Insolvency Law
Committee report suggests that Legislative Reciprocity must be adopted in furtherance
of the objectives under the code, however, it might have a detrimental effect on the
foreign creditors from the countries who are yet to adopt the model law, In the
example of Jet Airways itself, Netherland hasn’t adopted the Model law yet, hence it
wouldn’t recognize the Dutch proceedings as foreign non-main proceedings under the
provisions of draft part z.
51
4.3 Judicial Approach
Since the legislation was clearly insufficient, the law regarding cross-border insolvency is
built on common law principles and precedents. When faced with the questions of
international insolvency, either granting recognition to a judgment rendered by foreign court
or relating to the status of foreign creditors, in absence of appropriate legislative framework,
Indian courts have rendered rather far reaching but nonetheless conflicting orders. This
chapter seeks to analyse, through elaborate discussion of case laws, the judicial filling of this
absent legislation in India and the impact thereof.
4.3.1 Jurisdiction of Indian Courts in Winding up Proceedings

One of the first cases dealing with insolvency and winding up of foreign companies in India
was the case of “The Rajah of Vizianagaram v. Official Liquidator”110The question that
arose for determination before the Apex Court was whether the foreign creditors could prove
their claim when the debtor company, being a foreign company was being wounded up in
India? This was a complicated issue considering it arose in 1962 when India had not
developed any jurisprudence with respect to cross border winding up. But however, the
Hon’ble Supreme Court laid the foundation for administering transnational insolvency in
India. In the said case, the Vizianagaram Mining Co. Ltd (hereinafter ‘debtor’) was a
company established in England but had its principal place of business in India for the
purpose of mining at Kodur, Vizagapatam District. The applicant was the lessor of the land on
which the debtor was conducting its business. As the debtor failed to pay lease rent and repay
amounts borrowed from creditors, therefore filed a voluntary liquidation application before
the High Court. Upon submission of credit claims by non-residents, the appellant objected
before the Official Liquidator. The ground for objection was that the liquidation was only
with regard to the unregistered company “separate from the main company incorporated
outside India” for the assets situated in India therefore claims of foreign creditors cannot be
accepted. The Supreme Court took a rather progressive view and dismissed the arguments of
the appellant. Relying on several international judicial decisions and precedents laid down by
from Australian and English Courts, it was notably held that: “Held, that both on account of
specific provisions of the Act and of the general principles, foreign creditors can prove their
claims in the winding up of an unregistered company. The order of winding up of an
unregistered company operates in favour of all the creditors and of all the contributories of
the company. There is no reasonable basis for depriving the foreign creditors from
110
AIR. 1962 S.C. 500
52
participating in the distribution of the assets collected by the official liquidator in the winding
up proceedings in India.” Further while addressing the issue of the status of unregistered
company in India, the Court observed that such proceedings cannot be treated as winding up
of a separate entity but rather “ancillary winding up of the main company”. Though the
judgment could said to be ahead of its time, it did not address the concerns with regard
recognition of proceedings initiated outside or even the impact of main proceedings in India.
Hence, the law remained unresolved on several key issues of cross border insolvency.
Nevertheless, the Court did not provide responses to inquiries concerning the
acknowledgment of international judgements. As a result, there were still gaps in the legal
system regarding cross-border insolvency proceedings.
A relatively recent decision of Karnataka High Court in the case of “Bank of New York
Mellon, London Branch v. Cranes Software International Ltd”111 throws light on the
existing status of “interested parties”, other than the foreign creditor’s application for winding
up of domestic company under the Companies Act. The petitioner in the present case is an
institution incorporated in New York and providing banking services including trusteeship
services. The respondent company, which is incorporated in India, had engaged the petitioner
for trusteeship services to manage the Foreign Currency Convertible Bonds (Bonds) issued to
international creditors across the world. To clarify, these bonds were debts denominated in
foreign currency issued by the respondent to borrow funds from the international capital
market. As per the trust deed, whenever the Bonds become due and outstanding, discretion
shall vest with the Trustees to take action against the respondent to enforce the repayment of
the Bonds, if the bondholders so request in writing. However, the respondents communicated
their inability to repay the borrowed amount and hence the winding up petition was filed. An
important point of fact was that parties by way of contract conferred exclusive jurisdiction to
English Courts for settlement of any dispute regarding the bonds. But it was agreed between
trustee (petitioner) or the bond holders (creditors) were empowered to initiate proceedings in
any other court having competent jurisdiction. Interestingly the Hon’ble High Court traced the
contractual terms of the party to conclude that English courts would be the exclusive fact-
finding authority. The specific findings of the court were “Or for that matter it could even be
with reference to winding up proceedings under the Companies Act, 1956, subject to the
petitioner satisfying that there has been an adjudication and findings on the assertions as to
the breach of contract, the liability thereof and the inability on the part of the respondent to
pay its debts, with reference to the English law, by a competent court with jurisdiction - on
111
2014 SCC OnLine Kar 10105
53
which this court could act.” Therefore, a debt arising out of contractual default must not only
be preferred by the creditor. In conclusion, the court provided a lengthier procedure of
resolution though the contract did provide a simpler option to parties. Therefore, a purposive
interpretation would serve in harmonious resolution of insolvency cases.
4.3.2 Recognition of Foreign Decree & Insolvency Proceedings
Sumikin Bussan International (HK) Ltd. v. King Shing Enterprises and Anr.112
This is the leading case which highlights several issues that are faced by courts in dealing
with foreign proceedings and conduct insolvent creditors. The defendant borrowed from the
petitioner in Hong Kong which was guaranteed by second defendant T.K. Mody, who was an
Indian national permanently based out of Singapore. Upon default of payment by King Shing
Enterprises and thereafter by Mody, the petitioner-initiated recovery proceedings against the
debtors in Hong Kong. On having granted a successful order from Hong Kong, the petitioner
proceeded through filing an execution application against Mody’s personal property situated
in India. During the ongoing proceedings, Mody filed a bankruptcy petition in Singapore and
the liquidator was appointed as per the laws of Singapore. Meanwhile Bombay High Court
passed an execution order attaching the asset situated in India on January 12, 2004, much
before the insolvency order was passed by Singapore authority. The Hon’ble Hiigh Court,
while addressing the issue commented that domestic bankruptcy laws are inconsequential in
determining the principle of comity between states. Additionally placing reliance on the case
of Galbraith v. Grimshaw113 the High Court held that “order of adjudication by Singapore
High Court cannot affect the right of the attaching creditor of the insolvent.”
The important point to note here is that UNCITRAL Model Law was brought to the notice of
Bombay High Court but conceded that since it is not a binding treaty, “it has no legal basis in
India”. Moreover, this case pinpoints the inefficiency of existing laws that has not allowed
resolution of the insolvency proceedings in a decade. Also, the facts clearly illustrate that due
to lack of legislative backing creditors can fraudulently delay the liquidation process by
simply forum shopping.
Presently, Hong Kong is considered as a reciprocating country under s. 44A of the CPC, but
Singapore does not hold this status. Consequently, the Hong Kong Order in favour of the
petitioner was acknowledged, whilst the Singapore insolvency order was not acknowledged.
112
2008 SCC OnLine Bom 175
113
1910 A.C. 508
54
As seen in this instance, the English Common Law was inadequate in efficiently resolving the
matter for both creditors and debtors. This case underscores the absence of a comprehensive
framework for addressing cross-border insolvency matters in India. The existing system falls
short in ensuring a prompt and equitable resolution of complex bankruptcy proceedings.
Moreover, this case pinpoints the inefficiency of existing laws that has not allowed resolution
of the insolvency proceedings in a decade. Also, the facts clearly illustrate that due to lack of
legislative backing creditors can fraudulently delay the liquidation process by simply forum
shopping.
Bombay High Court delivered another striking judgment on this subject on the case of
“Marine Geotechnic LLC (Geotech) v Costal Marine Construction & Engineering Ltd”.114
The said case Geotech, a company incorporated in America, being the creditor moved US
Distrcit court and obtained an ex-parte decree against Costal Marine. However, Coastal
Marine blatantly denied any repayment on the ground they did not know of the decree.
Nonetheless, basis the decree Geotech initiated winding up proceedings in India. The Court
while dismissing the winding up proceedings held that any foreign decree, whether or not it is
issued in a reciprocating territory, would not be recognized as a valid decree of ‘debt’ for the
purpose of Section 433(e) of the 1956 Act, if it is devoid of merits or if it contravenes Section
13 of CPC. It was also held that “a party who has a foreign decree from a non-reciprocating
territory may nonetheless maintain a winding up petition on the original or underlying cause
of action. The fact that there is also a foreign decree does not bar the filing of such a petition.”
This judgment does clarify the position relating to filing a winding up petition on the basis of
foreign decree. However, it also sets a precedent where foreign creditor can escape winding
up proceedings by non-appearance before the foreign court, as ex-parte decree may not be
enforceable in India.
4.3.3 Access to Foreign Creditors

As discussed in the case of Rajah of Vizianagaram115, foreign creditors are afforded with
equal status as their domestic counterparts. But the question whether foreign creditor can
move Indian courts for recovery of debts was discussed in the case of “Intesa Sanpaulo
S.P.A v. Videocon Industries Limited.”116 This case could be regarded as the embodiment of
insolvency problem that this paper seeks to highlight and address. Not only it involves
multiple jurisdictions i.e. Italy, Cayman Islands and India, it also represents the complications
of capital borrowing from international market.
114
2014 SCC OnLine Bom 309.
115
Supra Note 111.
116
[2014] 183 Comp. Cas. 395 (Bom).
55
The petitioner in this case is a banking and financial institution duly incorporated under the
laws of Italy whereas the respondent is an Indian company, a leading manufacturer of
electronic products. The company structure was as follows:
EAGLE Corporation Limited (EAGLE) was a wholly owned subsidiary of respondent and
VDC Technologies S.p.A (VDC) was in turn the wholly owned subsidiary of EAGLE. In the
year 2006, the respondent sought financial assistance from petitioner for its step-down
subsidiary, VDC. Consequently, respondent became the guarantor for the borrowing through
execution of a “patronage letter”. Terms of the Patronage Letter clearly provide that
respondent was prohibited in altering the in EAGLE and similarly EAGLE was restricted
from disposing its shares held in VDC, without prior notice to petitioner. It was further agreed
between parties that in the eventuality of any default or bankruptcy initiated against VDC, the
respondent shall be liable to pay upfront the principal amount along with the interest.
Eventually VDC failed to fulfil its obligations under the loan agreement Further, the
respondent diluted its holding in EAGLE to merely 10% and EAGLE reduced its
shareholding in VDC to 83%. Both the events being in breach of the terms of patronage letter,
therefore, petitioner filed a winding up petition based on the decree passed by the Turin Court,
Italy.
At the time the request was recorded, Videocon was a successful organisation engaged in the
industry of selling consumer durables in India. All things considered, the BHC allowed the
appeal in favour of Italian bank. The Court repelled the contention of commercial solvency of
the respondent on the ground that such a consideration will lead to absurd results. It was held
that “every Company which is commercially solvent will refuse to pay the admitted debts and
then take up the ground of commercial solvency.…
The Company Court may in appropriate cases consider the larger public interest. For
instance, such criterion has effect on production, markets, workers and investors. But equally
important considerations are of commercial morality, national prestige and need to instill
confidence in international commercial transactions.”
This case exemplifies a legal dispute that spans beyond national borders and involves a
petition to dissolve the company. Moreover, the case is noteworthy due to the fact that a
creditor submitted a winding-up petition in India, despite the fact that the respondent
company was not bankrupt. According to Indian law, creditors have the right to submit
winding-up petitions against debtors, even if the debtors are not insolvent.
56
Another leading case was the collapse of Arvind Mills Ltd.117, a company that financed its
expansion and modernisation predominantly through loans extended by overseas investors.
Arvind Mills was hit hard by LPG reforms whereby the prices of jeans and denim clothing
fell considerably in India. The attempt to revive its business failed as Arvind Mills continued
to default on its re-payment obligations. As debt restructuring petition was made under the
provisions of Companies Act, 1956. The proposal required approvals from all the categories
of creditors i.e. both secured and unsecured. The company could lure most of the creditors in
favour of the proposed scheme, but nonetheless the worldwide lenders, who were majorly
secured lenders, casted a vote against the plan, as they felt it was biased to their interests.
Interestingly, the court after placing reliance on English commentaries and precedents held
that a foreign lender cannot demand a special status under the 1956 Act. The definition of
“class of creditors” makes allows for no such exception and hence all lenders, irrespective of
their residential status, shall enjoy equal rights under the 1956 Act. Taking everything into
account, the court categorically held that “without a contention of business interest or
commercial prudence among the objecting creditors, the international lenders were not
qualified for be treated as an alternate class of secured creditors”, only on the ground that
loans were made in foreign currency. The lesson learnt from this was not the status accorded
to foreign secured creditor, but instead the debt restricting scheme in fact help in reviving the
business of Arvind Mills. The company stands as one of the leading manufacturer of denim in
the world. Therefore, it is to be noted that a creditor friendly resolution may not always be in
the best interest of all stakeholders.
A progressive and swift approach was adopted by both Indian courts and official liquidators
in the case of “Reserve Bank of India v. BCCI”118. The Bank of Credit & Commerce
International (Overseas) (“BCCI”) was a financial institution incorporated in the Cayman
Island and operated in India through its branch office in Mumbai. It was acknowledged by the
Cayman Island Governor that BCCI was no longer solvent and therefore incapable of meeting
the obligations towards its depositors. Hence bankruptcy process was intimated in the county
of incorporation and an official liquidator appointed for administering the properties of debtor
in different jurisdictions, including the branch of United Kingdom. Accordingly, basis the
insolvency order passed in Cayman, the central banking institution of India, the RBI filed an
application for winding up the Indian operations, treating it as an unregistered company. The
High Court of Bombay authorised the SBI as the Official Liquidator on the petition filed by
RBI. Interestingly, instead of liquidating the assets of the branch in India, a scheme of
117
In Re: Arvind Mills Ltd., [2002] 111 Comp. Cas. 118 (Guj.)
118
AIR 1994 BOM. 177
57
arrangement was worked out wherein SBI was acquire the Mumbai Branch if BCCI. To view
this constructively, by adopting this approach the interest of the employees, assets, customers
having deposits in the branch as well the creditors was equitably safeguarded. Although there
is no specific law on these issues, the court correctly restructured the BCCI’s Mumbai branch
Macquarie Bank Limited v. Shilpi Cable Technologies Ltd.119

In this ruling, the Supreme Court of India provided an interpretation of two sections of the
Code. The first section, 9(3)(c), requires the operational creditor to submit a certificate from a
Financial Institution stating that the corporate debtor has not made any payment towards an
outstanding operational debt. The second section, 8(1), mandates the issuance of a demand
notice for an unpaid operational debt in favour of a foreign creditor.
The Supreme Court determined that the certificate required under Section 9(3)(c) of the Code
is a procedural provision that must be followed, but it is not mandatory. The Court also
concluded that interpreting Section 9(3)(c) in line with the objectives of the Code leads to the
understanding that certification by a Financial Institution should not be considered a strict
requirement or a condition that must be met before initiating insolvency proceedings. It
determined that a notice given by a lawyer on behalf of an operating creditor would be
considered legal, appropriate, and in compliance with the law. Consequently, the Supreme
Court has allowed non-financial foreign operating creditors to have increased opportunities to
submit applications and engage in bankruptcy procedures in India under the Code.
The Jet Airways Case120

Jet Airways started as an air taxi operator in 1993 and then became a scheduled carrier in
1995. It has ceased its operations since April 2019 due to substantial debt. Jet airways being
the first case in India which is paved a right way for the cross-border insolvency laws in the
country.
In June 2019, a consortium of creditors led by SBI approached the NCLT seeking a
declaration of Jet Airways' bankruptcy and the initiation of the CIRP under the IBC.
However, it was revealed that two months earlier, two European creditors had filed a
bankruptcy petition against Jet Airways in the Noord-Holland District Court of the
Netherlands, seeking the seizure of one of the airline's Boeing 777 aircraft parked at Schiphol
119
AIR 2018 SC 498
120
SBI v. Jet Airways (India) Ltd., CP 2205 (IB)/MB/2019
58
Airport in Amsterdam, due to unpaid dues of nearly Rs. 280 crores. As a result, the court in
the Netherlands appointed an administrator based in that country to oversee and manage any
assets belonging to Jet Airways that were located within the Dutch jurisdiction.
The Mumbai bench of the NCLT approved a resolution plan submitted by the Jalan-Kalrock
consortium to revive Jet Airways, directing the consortium to obtain the required approvals
and licenses to restart the airline within 90 days. The proposed resolution plan involved
injecting ₹600 crore over the initial two-year period. This investment would serve two
purposes: settling outstanding debts with creditors and enabling the acquisition of an 89.79%
ownership stake in the airline company. Additionally, it outlined the sale of existing non-core
assets and a repayment plan for financial creditors over five years, totaling ₹1,183 crore.121
The administrator appointed by the Dutch court approached India's NCLT, making two
requests. Firstly, they sought recognition of the insolvency proceedings happening in the
Netherlands. Secondly, they asked that the CIRP proceedings in India be put on hold. Their
rationale was that parallel insolvency cases in different jurisdictions could negatively impact
the restructuring efforts and harm creditors' interests. However, the NCLT denied recognition
to the Dutch proceedings, citing the lack of a formally notified cross-border insolvency law
under India's IBC as the reason for refusal.
Dissatisfied with the NCLT's decision, the Dutch administrator filed an appeal with the
NCLAT. The NCLAT overturned the NCLT's order and allowed the Dutch administrator to
collaborate with the Indian insolvency resolution professional. Additionally, the Dutch
administrator was permitted to participate in meetings of the Committee of Creditors, albeit
without voting rights. This was done to prevent any potential overlap or conflict of powers.
This case highlighted the contrasting philosophical approaches to cross-border insolvency

cases between India and the Netherlands. India follows a "universalist approach," where
insolvency proceedings are centralized and administered by one court in the jurisdiction
where the corporate debtor is domiciled, considering all its assets irrespective of their physical
location. On the other hand, the Netherlands adheres to a "territoriality approach," limiting a
court's jurisdiction strictly to assets present within its territorial boundaries.
121
https://www.mondaq.com/india/insolvencybankruptcy/1168814/jet-airways-an-insolvency-resolution-journey
59
The NCLAT's ruling aimed to strike a balance between granting relief to foreign
representatives and protecting the interests of affected parties, aligning with the objectives of
the UNCITRAL Model Law on Cross-Border Insolvency. The Jet Airways case exemplified
the need for incorporating a cross-border insolvency regime into existing laws in India.
60
CHAPTER V: RECOMMENDATIONS AND CONCLUSION
5.1 Recommendations
Despite efforts to harmonize cross-border insolvency regimes, significant challenges persist in
coordinating proceedings across multiple jurisdictions. This chapter aims to propose practical
solutions to address these obstacles, drawing insights from comparative analyses. The
ultimate goal is to develop a set of recommendations that prioritize efficiency, fairness, and
the protection of stakeholder interests in the context of cross-border insolvencies. These
suggestions have the potential to shape future policies and practices, fostering a more
cohesive and effective global insolvency landscape
.
5.1.1 Adopting The Model Law

The Model Law has become crucial due to the global financial situation and India's current
state in Cross Border Insolvencies. Globalization and the COVID-19 pandemic have led to a
significant increase in these insolvencies, making uniformity in regulation of these
proceedings essential. The Model Law has enabled the introduction of uniform global
regulation, leading to more peaceful and efficient resolution of cross-border insolvencies in
states where it has been adopted. This uniformity has been particularly beneficial in states
where the insolvency industry has been destabilized due to lockdown measures.
The status of Cross Border Insolvency in India is currently ambiguous and lacks clarity.122
Alleviating the workload on the Indian Judiciary would be advantageous, particularly if there
is no need for reciprocity. Implementing the Model Law would yield more advantages
compared to any bilateral treaty. The ‘Eradi Committee’ and ‘N.L. Mitra Committee’ made
recommendations about this matter in 2000 and 2001, but, these recommendations have not
been put into effect as of yet. In June 2018, the Indian Government introduced a suggested
draft chapter on Cross Border Insolvency, which aims to address a hitherto overlooked aspect
of the insolvency system. This development should be embraced with enthusiasm.
The 2018 study of the ILC suggested that India should adopt and implement the Model Law,
incorporating its application, reciprocity, procedure, and four principles. The report also
examined the potential effects of this adoption on judicial proceedings in India. The Model
Law exclusively pertains to overseas procedures involving corporate entities as debtors, and
does not offer support to foreign representatives handling personal bankruptcies. The ILC
122
Supra Note 27.
61
proposed first adopting the Model Law based on reciprocity, with the possibility of eventually
eliminating the reciprocity requirement after sufficient implementation experience. Foreign
creditors have the ability to start, take part in, and submit claims in legal actions governed by
the Code. However, in order to restrict the application of sections 234 and 235 of the Code
solely to individuals and partnership firms, amendments will be required. The four primary
principles highlighted were access, recognition, relief, coordination, and cooperation. If
enacted, a foreign primary legal process would be automatically granted a period of time
during which certain actions are prohibited, and the National Company Law Tribunal would
have the authority to decide whether or not to impose a similar period of prohibition against a
company in India that owes money. Modifications to the Code are necessary to streamline the
process of incorporating draft provisions.
India should implement the Model Law, which has been suggested by multiple committees
for nearly twenty years, in order to streamline the procedures for creditors, insolvency
practitioners, and courts. The Model Law can offer a legislative structure to assist India in
addressing difficulties related to resolving Cross Border Insolvency cases, while ensuring
minimal interference with national laws and policies. If implemented, it will profoundly alter
the perspective of Indian legislation on Cross Border Insolvency and establish its
dependability in tackling the difficulties that arise from the globalisation of international trade
and the integration of Indian financial systems with global financial systems.
5.1.2 Protocols on Cross Border Insolvency

The financial crisis exposed the full extent of the complexities involved in cross-border
insolvency cases. The Lehman Brothers group serves as a prime example, where a staggering
80 international subsidiaries initiated insolvency proceedings across 16 different jurisdictions.
While the Model Law provided some guidance in managing these simultaneous processes, it
fell short of adequately addressing all the intricate challenges that arose from the Lehman
case. A comprehensive cross-border insolvency framework proved crucial in resolving such a
situation. In the aftermath, cross-border protocols have gained increasing popularity as a
means to bridge the gaps and loopholes that the Model Law alone could not tackle.
Cross-border protocols play a crucial role in facilitating the agreement between parties about
the resolution of cross-border issues that emerge from insolvency, with the support of judicial
acknowledgment. Protocols are created to establish the procedures for recognising
proceedings and allowing parties to exercise their right to appear and present their case in
62
court. After the protocol is formulated, it is submitted to the bankruptcy courts for approval
and implementation.
Cross-border insolvency protocols play a crucial role in helping judicial systems of emerging
economies acclimatize themselves to cross-border insolvency issues, as bankruptcy and
insolvency laws develop. Cross-border insolvency protocols provide ample precedent for
courts to develop expertise and understanding of intricate cross-border issues, and act as a
guide in cooperation and coordination amongst proceedings in multiple venues.
The doctrine of comity has played a crucial role amongst common law jurisdictions in the
recognition of proceedings even before the Model Law. In the decades preceding the adoption
of the Model Law, the doctrine of comity enhanced judicial cooperation, although it does not
offer the same degree of predictability and reliability as full-fledged cross-border insolvency
law. Yet, its importance should not be under-stated: the doctrine of comity continues to be
encompassed within the Model Law, and is the basis for the principles of recognition and
reciprocity. I argue that, from an Indian perspective, the adoption of cross-border insolvency
protocol guidelines that can be used in restructuring documentation prove to be the best step
forward. Further, as seen in the Jet Airways case, Indian courts seem to be warming up to the
idea of formal protocols as a sort of interim step, as incorporating a cross-border insolvency
framework into the Code takes time.
Meanwhile, the usage of protocols has arisen as a new effective way to address specific cross-
border challenges. If cross-border insolvency issues can be consistently resolved through
bilateral agreements between courts and administrators, the demand for a comprehensive and
less adaptable international insolvency legislative process, which comes with challenges
related to jurisdictional interests and choice of law matters, may decrease significantly.
A protocol is “nothing less than a tailor-made law for the individual case”. They are seen as
the most effective solution for addressing specific difficulties that arise in a particular scenario
and require prompt resolution. Governments should embrace this, as insolvency is mostly a
private dispute.
In the wake of the complexities revealed, several cross-border protocols have been
formalized, including one for Lehman Brothers itself. The Lehman case spanned the bank's
operations in over 40 countries, resulting in a staggering 75 bankruptcy filings across 9
63
nations, 6 of which had not even adopted the Model Law. To navigate this labyrinth, a cross-
border insolvency protocol based on the principles of the Model Law was employed to find a
resolution.
Despite the existence of frameworks like the Model Law and the EC Insolvency Regulations,
there appears to be a growing inclination towards utilizing tailored cross-border agreements in
such intricate cases. These protocols seemingly provide more flexibility and customization to
address the unique challenges posed by massive cross-border insolvencies that cut across
multiple jurisdictions with differing insolvency regimes.
5.2 Conclusion
It has been established from the discussion above that Indian framework is not only
insufficient in resolving cross-border insolvency cases but rather a chaos in terms of
predictability. While Indian government propagates and markets the idea of “ease of doing in
business in India”, such lack of consistency in regulatory framework is a discouraging factor
for foreign investors and financial institutions.
Insolvency is an area of law that is deeply interwoven with economic conditions of a state,
which explains why India is so conservative towards adopting universalism and keep intact
the control and authority of Indian courts. Some argue that there is an existing system under
IBC i.e. executing treaties and issuing letters for co-operation under Section 234 and 235
could also be equally effective. The existing legislative text in India cannot quickly harmonize
cross-border insolvency laws due to the complexity of convention negotiations, ratification,
and adoption procedures.123Also, it must be kept in mind that the members of the committee
entrusted with drafting of UNCITRAL Model Law were divided on the form of text of the
legislation i.e. on adoption-based model law or a convention. Taking a cue from the failure of
several conventions, the majority was in favour of the view that Model Law was suitable for
harmonizing cross - border insolvency cases in the shortest possible time than a convention.
To summarise, in words of Professor Fletcher, there is an inquisitive absence of definitive

information with respect to the utilization of the treaties, which as a matter of fact maybe due
to the absence of importance given to case-laws in the international law arena of civil law
world. And, as he additionally contends, the participation of these treaties, excluding as it
123
Clift, Jenny, The UNCITRAL Model Law on Cross-Border Insolvency – a Legislative Framework to
Facilitate Coordination and Cooperation in Cross-Border Insolvency. 12 Tul J Int’l & Comp L 307, 318 (2004)
https://heinonline.org/HOL/LandingPage?handle=hein.journals/tulicl12&div=12&id=&page=
64
accomplishes more ''economically empowered'' nations, does not seem to have prospects of
success.
On the other hand, it is also important to acknowledge and address the situation of growing
non-performing assets in India. While a number of high-ticket companies have been swept
into the insolvency storm started under IBC, the allegations of financial irregularities, fraud
and diversion of funds have been pouring in. The way entities owned by Nirav Modi have
initiated voluntary bankruptcy in the US, ominously exposes the indigenous methods
employed by these multi-layered companies are able to dispose their assets and diverge funds
to defraud creditors. US courts, however, stayed their insolvency proceedings considering the
ongoing investigation in India on account of fraud. In this backdrop, the existing system does
not deal with the legitimacy of orders passed by Indian authorities and recognition of
moratorium declared under IBC to extend over foreign assets. Therefore, unless India adopts
an international framework, the remedies in such cases are a distant dream. The entire
incident has emphasized the pressing necessity for a vigorous cross-border insolvency regime
in India. Even with the ongoing prosecution of Vijaya Malya, who has been held personally
liable for the laundering money through his corporate entities, we need to consider that India
is likely to gain more than it has to lose by bringing in these provisions. Also, the number of
cases filed for cross border insolvencies are relatively less at this point, therefore the
contemplation of bandwidth may not be a major issue at this point.
Adopting an entirely new regime which directly impacts the authority of courts may not be an
easy transition. Especially considering the peculiarities of Indian society, which treats their
traditions with utmost sanctity, resistance is bound to occur. Indian legislature has always
leaned in favour of territoriality whereas the judiciary has paved way for a more modified
universalism. It must be appreciated that adoption of the Model Law is an opportunity for
India to revamp its insolvency laws to pace up to international standards.
However, as the conflict still lingers and confusion persist, unless concrete steps are taken to
revolutionise the cross-border insolvency laws, India must in the interim execute agreements
and negotiate treaties with the countries with which it has extensive trade relations.
Alternatively, IBC should incorporate a broader list of reciprocating territories for execution
of insolvency orders. But to find a long-term solution, India must acknowledge that many
treaties and domestic models have failed and led to disappointments in developing an
effective regime for this problem. The exchange of reciprocal arrangements is an ineffective
65
procedure that is probably never going to deliver a universalist procedure for reorganisation of
business. The initiatives taken by different states in order to achieve a comprehensive
solution. Finally, in view of the magnitude of cross-border insolvencies, discovery of a
practical solution “cannot be left to individual nation states but must be the target of
coordination at the international level.”
Although the UNCITRAL Model may have its flaws, it possesses some notable strengths.
Nevertheless, the model will not achieve its maximum capability unless there is widespread
adoption of it. Only when the motivating aspects of regularity and predictability are achieved
can they genuinely be realised. To achieve this objective, it is crucial to promote the adoption
of a legal framework in developing countries, particularly in India, that enables reliable and
predictable resolution of cross-border insolvency cases. Given the current rate of economic
growth in nations, it is probable that numerous business transactions would involve debtors
and creditors across multiple nations. Consequently, there will be a greater demand for
consistency and predictability in cross-border insolvencies involving these nations.
66
BIBLIOGRAPHY
BOOKS
1. Wood, Philip R., Principles of International Insolvency, Law and Practice Of

International Finance; London: Sweet & Maxwell, 2007.
2. Westbrook Jay, Lawrence; Booth, Charles D.; Paulus, Christoph G.; Rajak, Harry. A
Global View of Business Insolvency Systems. Washington, DC: World Bank and Brill.,
2010.
3. Mevorach Irit, The Future of Cross-Border Insolvency: Overcoming Biases and
Closing Gaps, Oxford University Press, 2018
4. Omar Paul, International Insolvency Law: Reforms and Challenges, Markets and the
Law, Routledge, 2013.
5. Biswal Mamta, Insolvency and Bankruptcy National And International Perspectives,
Thomson Reuters, 2022.
6. Mittal Akaant, Insolvency and Bankruptcy Code: Law and Practice, Vol. 1, EBC,
2020.
JOURNALS
1. Mishra Priya; Feibelman Adam, The Institutional Challenges of a Cross-Border

Insolvency Regime, Corporate and Business Law Journal, Vol 2, 2021.
2. Fletcher, Professor Ian, Evolving Approaches to the Treatment of Security Rights in
Cross-Border Insolvency, Vol. 46, Tex Int’l LJ, 2011.
3. Halimi, Ryan, An Analysis of the Three Major Cross-Border Insolvency Regimes,
International Immersion Program Papers 2017.
4. John J. Chung, ‘The New Chapter 15 of the Bankruptcy Code: A Step toward Erosion
of National Sovereignty’, Nw. J. Int'l L., 2007.
5. Nidhi Shetye, International Insolvency: An Indian Perspective on Cross-Border
Treatment of Cases, Vol. 39, Fordham International Law Journal, 2016.
6. Sean E. Story, Cross Border Insolvency: A comparative Analysis, Vol. 32, No. 2,
Arizona Journal of International & Comparative Law, 2015.
7. Sethi Sadhika & Srivastava Rajat, 'Cross Border Insolvency': The Indian Legal
Regime vs Rest of The World, Vol. 2 Iss. 2, Indian Journal of Integrated Research in
Law, 2022.
8. Kumar Ramesh, Understanding Cross Border Insolvency: An Indian Overview, Vol.
1, Iss. 3, Jus Corpus Law Journal, 2021.
67
9. Chandra Mohan, Cross-border Insolvency Problems: Is the UNCITRAL Model Law
the Answer, Vol. 21, International Insolvency Review, 2012.
10. Shukla Sudhakar and Jayaram Kokila, Cross Border Insolvency: A Case to Cross the
Border Beyond the UNCITRAL, IBBI, 2020.
NEWSPAPERS
1. The Hindu
2. The Economic Times
3. The Financial Express
ONLINE SOURCES
1. Aparna Ravi Filling in The Gaps in The Insolvency And Bankruptcy Code – Cross
Border Insolvency, IndiaCorpLaw, https://indiacorplaw.in/2016/05/filling-in-gaps-in-
insolvency-and.html (2016)
2. Abhishek Saxena and Jyoti Singh, Cross-Border Insolvency: Breaking Down The
Indian Insolvency And Bankruptcy Code, 2016, Mondaq: Indian Legal Impetus, (July
2016)
http://www.mondaq.com/india/x/506600/Insolvency+Bankruptcy/CrossBorder+Insolv
ency+Breaking+Down+The+Indian+Insolvency+And+Bankruptcy+Code+2016
3. Mithilesh Kumar, ‘Cross Border Insolvency: Indian Law Vis A Vis International Law:
UNCITRAL Model’, Mondaq: Indian Legal Impetus, (12 Aug, 2013)
http://www.mondaq.com/india/x/257314/international+trade+investment/Cross+Borde
r+Insolvency+Indian+Law+Vis+A+Vis+International+Law+UNCITRAL+Model
4. Purpose of Model Law available at
http://www.uncitral.org/uncitral/en/uncitral_texts/insolvency/1997Model.html
5. Shivadass Prashanth and G Nitin, Centre of Main Interest in cross-border insolvency
proceedings, Bar and Bench, https://www.barandbench.com/law-firms/view-
point/centre-of-main-interest-in-cross-border-insolvency-proceedings (2022)
68

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“CROSS-BORDER INSOLVENCY UNDER THE INSOLVENCY AND

BANKRUPTCY CODE, 2016: A COMPARATIVE CRITICAL

Under the Guidance of

NMIMS School of Law

SVKM’s NMIMS, School of Law

This is to submit that this written submission in my dissertation entitled “Cross-Border

Mr. Saaransh Shukla

Academic Guide (s)

List of Abbreviations Definition

In Re Travancore National Bank Ltd., 1939 Mad. 318………………………………..….33

Reserve Bank of India v. BCCI AIR 1994 BOM. 177…………………………………...57

SBI v. Jet Airways (India) Ltd., CP 2205 (IB)/MB/2019…………………………….15, 58

The Raja of Vizianagaram v. Official Receiver, AIR 1962 SC 500………………….32, 51

Transcore Vs. Union of India AIR 2007 SC 712…………………………………………33

Statement by the Candidate ....................................................................................................... 2

UNCITRAL Model Insolvency and Insolvency Law

1.1 Literature Review

1. A. K. Sikri (2001) “Cross Border Insolvency: Court-To-Court Cooperation” 23

2. Ran Chakrabarti (2018) “Key Issues in Cross-Border Insolvency”24

3. Nidhi Shetye (2016) “International Insolvency: An Indian Perspective on Cross-Border

6. Feibelman, Adam and M, Priya (2021) “The Institutional Challenges of A Cross-

The paper discusses the challenges of managing cross-border insolvency proceedings

7. Andrew Godwin, Risham Garg, Debaranjan Goswami (2023) “Cross-Border

8. Mohan S. Chandra (2012) “Cross-border Insolvency Problems: Is the UNCITRAL

9. Gopalan Sandeep and Guihot Michael (2015) “Recognition and Enforcement in

law continues to be characterized by a lack of clarity. This article examines the

11. Shashank Saksena (2022) “Implementation Issues in Cross Border Insolvency

The author provides an intelligible outline of the insolvency framework implemented

17. Confederation of Indian Industry (2019) “Cross-Border & Personal Insolvency in

It highlights the conspicuous absence of cross-border insolvency provisions in the IBC of

1.3 Research Statement

1.4 Research Questions

1.5 Research Methodology

Theoretically, this should create a framework for foreign representatives to obtain

2.1 Statutes Governing Cross-Border Insolvency in India

Before proceeding to the landscape of the insolvency laws in India, it is pertinent to

Further, to wind up a foreign company it must be treated as an unregistered company.57 It has

2.2 Challenges in the Current Framework

This chapter delves into a comparative examination of cross-border insolvency regimes,

3.1 Comparative Analysis – UK And USA

3.1.1 United Kingdom

3.1.1.1 The EC Regulation on Insolvency Proceedings

3.1.1.2 The Cross-Border Insolvency Regulations, 2006

3.1.1.3 Insolvency Act, 1986

3.1.2 United States of America

3.2 International Overview

3.2.2 New Zealand

3.2.4 South Korea

An advanced law implemented in South Korea is the elimination of the concept of

4.2 Draft ‘PART Z’

The proposed Part Z comprises a collection of proposed recommendations that focus on a

4.3.1 Jurisdiction of Indian Courts in Winding up Proceedings

4.3.2 Recognition of Foreign Decree & Insolvency Proceedings

4.3.3 Access to Foreign Creditors

Macquarie Bank Limited v. Shilpi Cable Technologies Ltd.119

The Jet Airways Case120

This case highlighted the contrasting philosophical approaches to cross-border insolvency

5.1.1 Adopting The Model Law

5.1.2 Protocols on Cross Border Insolvency

To summarise, in words of Professor Fletcher, there is an inquisitive absence of definitive

1. Wood, Philip R., Principles of International Insolvency, Law and Practice Of

1. Mishra Priya; Feibelman Adam, The Institutional Challenges of a Cross-Border

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