Cross-Border Insolvency

Debanshu Mukherjee

Vidhi Centre for Legal Policy

June’ 22
 Current legal framework
Procedure under the Insolvency
and Bankruptcy Code, 2016
(“Code”)
• Section 234 and 235
• Bilateral agreements to
be entered into by the
Central Government
with other countries.
• Adjudicating Authority
to issue letter of
request to such
countries.
Treatment of Indian
Enforcement of foreign
proceedings and
judgments in India
judgments abroad
• Section 13 and 44A of • Depends on the law of
the Civil Procedure that country.
Code, 1908 (“CPC”). • 51 countries have
• Definition of ‘foreign adopted the UNCITRAL
judgments’ does not Model Law on Cross-
include administrative Border Insolvency, 1997
orders, interim orders (“Model Law”).
etc.
• Only for reciprocating
jurisdictions.
 Companies Act
• Winding up of an unregistered company on the ground of
insolvency (Section 375 of 2013 Act)
• The BCCI Case 1992
• Liquidation proceedings in Bombay
• Scheme of Arrangement – SBI acquired Indian operations. All depositors
protected
 IBC Practice
• Jet (2019)
• SBI initiated proceedings; got admitted in June, 2019
• Dutch proceedings had started in May, 2019
• The Dutch administrator approached NCLT, Mumbai – didn’t get
recognised
• NCLAT overturned
• Pursuant to the NCLAT’s directions the Dutch and India sides agreed to a Cross-
border insolvency protocol
• India recognized as COMI, Indian proceedings recognised as main proceedings,
Dutch proceedings recognised as non-main
• It provided for co-ordination of proceedings, information sharing etc.
• SEL Manufacturing (2019)
 Outline of the Model Law
Direct access to foreign insolvency professionals to domestic courts to
commence and participate in proceedings against debtor

Recognition of foreign insolvency proceedings by domestic courts as main or

non-main. Automatic relief for main proceedings and discretionary relief for
non-main proceedings.

Direct cooperation between foreign courts, domestic courts, foreign insolvency

representatives and domestic insolvency representatives.

Coordination of concurrent insolvency proceedings in more than one country

regarding the same debtor.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model
heading Law Law and Reason

1. Scope of Article 1 Section 1 (1) The words “or other

application (1) The scenarios for application of (1) Scenarios for application- same as interested persons”, for
the law are: Model Law, except deletion of “other commencement or
[APPLICATIO (i) Assistance is sought by foreign interested persons”. participation in domestic
N] representative or foreign (2) Application of the law is limited to insolvency proceedings,
representative in enacting corporate debtors under the Code. have not been included
country (Jet); (3) The Central Government can notify since it is unclear who
(ii) Assistance is sought in foreign classes of corporate debtors or entities these parties would be and
country in connection with to whom application of this Part is including it may make the
domestic insolvency proceeding exempt. right to commencement of
[SEL Manufacturing]; (4) Provisions of this Part to apply to- proceedings too broad.
(iii) A foreign and domestic (i) Countries that have enacted the Model (2) The application of this Part
insolvency proceeding are Law (Reciprocity); has been limited to
taking place concurrently (Jet); (ii) Countries with whom agreements are corporate debtors under the
(iv) Creditors or other interested entered into by the Central Code since personal
persons in foreign country want Government. (4) The Central insolvency has not been
to commence or participate in Government may add or omit notified and it may be too
domestic insolvency countries to whom this Part shall apply burdensome to apply cross-
proceedings. in the interest of the security of the border in personal
(2) Any entities to whom application State or public interest. insolvency at the moment.
may be exempt. (5) The Central Government may modify
application of this Part in relation to any
country if it is in the interest of the security
of the State or public interest.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

1. Scope of - - (3) The Central Government has

application been given the power to make
modifications in the application of
this Part with respect to entities
and countries.

(4) A reciprocity requirement has

been provided to limit application
of this Part to countries which will
have also enacted the Model Law.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason
2. Article 2 Section 2 (1) The Adjudicating Authority
Definitions The Model Law provides Following definitions have been has been provided to be
definitions of foreign modified or added- notified, as it has been
proceeding, foreign main (1) ‘Adjudicating Authority’ for this contemplated that only a
proceeding, foreign non-main part has been defined as the few benches of NCLT will
proceeding, foreign National Company Law administer cross-border
representative, foreign court, Tribunal (“NCLT”) and National insolvency provisions.
and establishment. Company Law Appellate This is due to
Tribunal notified by the Central infrastructure restrictions
Government to perform that may be present in
functions in this Part. NCLTs.
(2) ‘centre of main interests’ has (2) A look back period of 3
been defined to have meaning months has been
assigned in section 14 of this provided for
Part. determination of COMI
(3) ‘establishment’ has been and establishment to
restricted to be determined by a avoid forum shopping and
three month period prior to the misuse.
commencement of foreign main
proceedings.
 Key Definitions
“foreign main proceeding” means a foreign proceeding taking place in the country where the corporate
debtor has the centre of its main interests; [SEL Manufacturing Jet]

“foreign non-main proceeding” means a foreign proceeding, other than a foreign main proceeding, taking
place in a country where the corporate debtor has an establishment [Jet – Holland proceedings];

“foreign proceeding” means a collective judicial or administrative proceeding in a foreign country,

including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the
assets and affairs of the corporate debtor are subject to control or supervision by a foreign court, for
the purpose of reorganization or liquidation;

Explanation: For the purposes of this Part, the term “reorganisation” shall have the same meaning as
“resolution” under the Code.

“foreign representative” means a person or body authorized in a foreign proceeding to administer the
reorganization or the liquidation of the corporate debtor’s assets or affairs or to act as a
representative of the foreign proceeding and includes any person or a body appointed on an interim
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason
3. Article 3 Not incorporated. The Guide to Enactment to
International In case of any conflict between the Model Law provides that
Obligations the text of the Model Law and for countries which do not
of the State any treaty or agreement, the have self-executing treaties,
treaty or agreement shall it may not be appropriate to
override the Model Law. include Article 3 in their
cross-border law.

Treaties may have various

obligations like providing
letters rogatory, which are
specifically provided to not
apply in the Model Law.

Thus, the intention of the

Model Law in relation to this
provision may not apply
uniformly to make all treaty
requirements to prevail over
the Model Law.
Sr. No. and Deviation from the Model
heading Model Law Part Z Law and Reason

4. Article 4 Within section 2(a) No significant deviation.

Competent It provides that the a certain Already incorporated in the
court or court shall be provided to definition of ‘Adjudicating
authority perform functions in the law Authority’ under section 2(a) of
relating to recognition and Part Z.
cooperation.

5. Article 5 Section 3 No significant deviation.

Authorisatio An insolvency professional Domestic insolvency
n of authorised under the domestic professionals authorised under However, the insolvency
insolvency law shall be authorised to act the Code are similarly empowered professional will be subject
professional in a foreign State on behalf of subject to the regulations of the to regulations by IBBI while
to act in a a domestic insolvency Insolvency and Bankruptcy Board acting in a foreign State.
foreign proceeding, as permitted by of India (“IBBI”).
State the applicable foreign law.

[Our IPs in
other
countries]
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason

6. Public Article 6 Section 4 The Central Government

Policy Nothing in the Model Law
exception prevents the court from
refusing to take any action
because it is manifestly
contrary the public policy of
that State.
Along with the text of the Model may have a say.
Law, the provision also provides
that the Central Government to be
given an opportunity to make
submissions.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

7. Additional Article 7 Section 5 No significant deviation.

Assistance The court and domestic insolvency The Adjudicating Authority and the
under other professional may provide additional insolvency professionals may provide
laws assistance to foreign representative additional assistance to foreign
under other laws of the enacting representative under other laws of India.
State.
8. Article 8 Section 6 No significant deviation.
Interpretation In the interpretation of the Model In the interpretation of this Part, regard is
Law, regard is to be had to its to be had to its international origin and to
international origin and to the need the need to promote uniformity in its
to promote uniformity in its application and the observance of good
application and the observance of faith.
good faith.
9. Right of Article 9 Section 7 (1) The right of access of the
direct access A foreign representative is entitled to (1) A foreign representative is entitled to foreign representative has
apply directly to a court in the apply to the Adjudicating Authority been restricted to the
[Foreign IP enacting State. and exercise his powers and Adjudicating Authority and not
should have functions under the Code in the to any court in India. Restricts
direct access; manner as may be prescribed. the powers of a foreign
controversial (2) A foreign representative shall be insolvency representative.
] subject to a code of conduct as
specified.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason

9. Right of - - (2) Rules may provide that a

direct foreign insolvency
access representative shall perform
functions and access the
Adjudicating Authority
through an Indian insolvency
professional.
(3) To ensure effective
supervision, it has been
contemplated that the
regulations will provide a
code of conduct for foreign
insolvency representatives,
similar to the one for Indian
insolvency professionals.
 Issues
1. Whether foreign representatives should be given ‘direct access’ to courts?
- Currently, it has been contemplated that an Indian insolvency professional shall be
appointed as a representative for a foreign representative.
- Foreign representatives may be lawyers and are not permitted to access courts in
India directly (Bar Council of India v. A.K. Balaji & Ors.).
- Foreign representatives have been made subject to code of conduct, which is to be
similar to domestic insolvency professionals, to ensure similar supervision.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason

10. Limited Article 10 Section 8 Important to have some

jurisdiction The sole fact that an Incorporated subject to IBBI’s powers that extend beyond
application under the Model power to impose penalties and the scope of the application.
[over foreign law has been made by a issue directions.
IP and foreign representative, does
assets] not subject the foreign
representative or the foreign
assets and affairs of the debtor
to the jurisdiction of the courts
in the enacting State for any
purpose other than application.

11. Article 11 Sections 7 No significant deviation?

Application A foreign representative is A foreign representative is entitled
by foreign entitled to apply to commence to approach the AA for exercising
representati a domestic insolvency his powers and functions under the
ve to proceeding if the conditions for chapter.
commence commencing such a
domestic proceeding are otherwise met.
insolvency
proceeding
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

12. Article 12 Section 9 No significant deviation.

Participation of Upon recognition of a foreign Subject to section 7 of this Part, upon
a foreign proceeding, a foreign representative recognition of a foreign proceeding, a Reference to section 7 has been
representative is entitled to participate in a foreign representative is entitled to kept to clarify that the procedure
in a domestic domestic insolvency proceeding participate in a insolvency proceeding prescribed under section 7 for
insolvency regarding the debtor. under the Code regarding the corporate access by foreign representatives
proceeding debtor. shall apply

[In CIRP]
13. Access of Article 13
foreign (1) Foreign creditors have the same
creditors to a rights regarding commencement
domestic of, and participation in, a
insolvency domestic insolvency proceeding
proceeding as creditors in the enacting
State.
(2) The above does not affect
ranking of claims in a domestic
insolvency proceeding, except
that the claims of foreign
creditors shall not be ranked
lower than the general non-
preference claims.
Section 10 The Guide to Enactment to the
(1) Foreign creditors have the same Model Law provides that States
rights regarding commencement of, may choose to exclude foreign
and participation in, an insolvency tax and social security claims
proceeding under the Code as from this provision since it is
creditors. owed to another State entity and
(2) The above does not affect exclusion may be a huge amount of debt.
of foreign tax and social security
claims from a proceeding under the Singapore and US have also
Code or the ranking of claims. made similar exclusions.
(3) Claims of foreign creditors, other
than foreign tax and social security
claims, shall not rank lower than the
general class of claims under section
53(1)(f) of the Code (unless an
equivalent domestic claim has a
lower rank under the Code).
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

14. Notification Article 14 Section 11 (1) To restrict discretion given to

to foreign (1) Whenever under notification is to (1) Whenever notification to creditors is NCLTs, steps to be given by
creditors of a be given to creditors under required under the Code, such the court regarding notification
proceeding domestic insolvency notification shall also be given to has not been retained.
under the proceedings, such notification known creditors that do not have (2) The Central Government is to
domestic shall also be given to the known addresses in India. provide mechanism for
insolvency law creditors that do not have (2) Such notification shall be made to notifying. Since individual
addresses in this State. The foreign creditors in a manner as may notifications may lead to
[Notify FCs court may order that appropriate be prescribed. No letters rogatory or excessive costs, alternate
properly] steps be taken in this regard for other, similar formality is required. modes may be listed in the
creditors whose address is (3) The notification shall for subordinate legislation.
unknown. commencement of proceeding shall:
(2) Such notification shall be made (a) Indicate a reasonable time period for
to the foreign creditors filing claims and specify the place for
individually, unless the court their filing;
considers it appropriate (b) Indicate whether secured creditors
otherwise. No letters rogatory or need to file their secured claims; and
other, similar formality is (c) Contain any other information
required. required to be included in such a
(3) The notification shall for notification to creditors pursuant to the
commencement of proceeding law of India and the orders of the
shall: Adjudicating Authority.
(a) Indicate a reasonable time
period for filing claims and
specify the place for their filing;
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

14. Notification (b) Indicate whether secured - -

to foreign creditors need to file their secured
creditors of a claims; and
proceeding (c) Contain any other information
under the required to be included in such a
domestic notification to creditors pursuant to
insolvency law the law of the enacting State and
the orders of the court.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

15. Application Article 15 Section 12 (1) Alternate proof to be given in

for recognition (1) A foreign representative may
of a foreign apply to court for recognition of
proceeding the foreign proceeding in which
he has been appointed.
(2) An application shall be
[Recognition] accompanied with-
(i) Certified copy of decision
[SEL commencing foreign proceeding
Manufacturing] and appointing foreign
representative; or
(ii) Certificate from foreign court
affirming the same; or
(iii) Any other proof establishing the
same if acceptable to the court;
and
(iv) Statement identifying all foreign
proceedings in respect of the
debtor that are known to the
foreign representative.
(3) Court may require translation of
documents.
(1) A foreign representative may apply 2(iii) has been made subject
to the Adjudicating Authority for to prescription by Central
recognition of the foreign proceeding Government.
in which he has been appointed. (2) Translation of documents in
(2) An application shall be accompanied English has been made
with- mandatory to reduce time
(i) Certified copy of decision taken in getting documents
commencing foreign proceeding translated after submission of
and appointing foreign application. Similar deviation
representative; or has been made in Singapore
(ii) Certificate from foreign court and US too.
affirming the same; or
(iii) Any other proof establishing the as
may be prescribed; and
(iv) Statement identifying all foreign
proceedings in respect of the debtor
that are known to the foreign
representative; and
(v) A translation of documents in
English, if applicable.
(3) The application shall be in such form
and with such fees as may be
prescribed.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

16. Article 16 Section 13 (1) In order to avoid forum

Presumptions (1) If the decision or certificate given
concerning as proof with the application,
insolvency indicates that the foreign
proceeding and the foreign
representative are as per their
[COMI] definitions in article 2, the court
is entitled to so presume.
(2) The court is entitled to presume
that documents submitted in
support of the application for
recognition are authentic,
whether or not they have been
legalized.
(3) In the absence of proof to the
contrary, the debtor’s registered
office, or habitual residence in
the case of an individual, is
presumed to be the centre of the
debtor’s main interests.[COMI]
(1) Article 16(1) and (2) have been
incorporated without any significant
deviations.
(2) In relation to article 16(3), a
corresponding separate provision
has been inserted for determination
of the Centre of Main Interests:
(i) In the absence of proof to the
contrary, the debtor’s registered
office is presumed to be the centre
of the debtor’s main interests.
(ii) The above presumption shall only
be applicable if the registered
office of the corporate debtor has
not been moved to another State
within the 3 month period prior to
commencement of insolvency
proceedings in such a State.
(iii) Adjudicating Authority to conduct
assessment, based on factors
prescribed by the Central
Government, in a manner that is
ascertainable by third parties like
creditors of the corporate debtor.
shopping and misuse of the
presumption of COMI, it has
been provided that the
presumption is only applicable
if the registered office has not
been moved to another State
within the 3 month period prior
to commencement of
insolvency proceedings in such
a State.
(2) Factors for determination of
COMI are to be given by the
Central Government. COMI
being ‘ascertainable by third
parties’ is one of the primary
factors in its determination,
according to the Guide to
Enactment on the Model Law .
 Issues
1. Whether the 3-month look back period in section 14(2) needs to be provided? Also,
whether the 3-month period should be calculated from date of commencement or
date of filing of proceedings?
- The Model Law does not provide such a 3-month period, but European Union
Regulations do. It has been provided in Part Z to avoid forum shopping and ensure that
the debtor does not avail benefits of recognition as main proceeding in multiple
jurisdictions.
.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

17. Decision to Article 17 Section 15 In order to maintain consistency

recognise a (1) A foreign proceeding shall be (1) Article 17(1),(2) and (4) have been with the time taken by the
foreign recognized if: incorporated with no significant Adjudicating Authority in deciding
proceeding (i) The foreign proceeding is within deviations. applications under sections 7, 9
the scope of the its definition; (2) An application for recognition shall or 10 of the Code, a period of 14
(ii) The foreign representative be decided by the Adjudicating days has been provided.
applying for recognition is within Authority within 14 days from the
the scope of the its definition; date of filing of the application.
(iii) The application meets the
requirements given in article 15;
and
(iv) The application has been
submitted to the court referred
to in article 4.
(2) The foreign proceeding shall be
recognized:
(v) As a foreign main proceeding if
it is taking place in the State
where the debtor has the centre
of its main interests; or
(vi) As a foreign non-main
proceeding if the debtor has an
establishment in the foreign
State.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

17. Decision to (3) An application for recognition of - -

recognise a a foreign proceeding shall be
foreign decided upon at the earliest
proceeding possible time.
(4) The provisions of articles 15, 16,
17 and 18 do not prevent
modification or termination of
recognition if it is shown that the
grounds for granting it were fully or
partially lacking or have ceased to
exist.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation from the Model
heading Model Law Part Z Law and Reason
18. Article 18 Section 16 In order to ensure that the
Subsequent From the time of filing the From the time of filing the Adjudicating Authority is
information application for recognition of application for recognition of the aware of any domestic
the foreign proceeding, the foreign proceeding, the foreign insolvency proceedings, it
[FR to keep foreign representative shall representative shall inform the has been provided that the
local court inform the court promptly of: Adjudicating Authority promptly of: foreign representative shall
updated on also inform the Adjudicating
foreign (a) Any substantial change in (a) Any substantial change in the Authority of this.
proceedings the status of the recognized status of the recognized foreign
] foreign proceeding or the proceeding or the status of the
status of the foreign foreign representative’s
representative’s appointment; appointment; and
and (b) Any other foreign proceeding or
(b) Any other foreign proceeding under the Code
proceeding regarding the same regarding the same corporate
debtor that becomes known to debtor that becomes known to the
the foreign representative. foreign representative.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

19. Relief that Article 19 Not incorporated There is no interim relief which
may be 1. From the time of filing an the Adjudicating Authority can
granted upon application for recognition until give in domestic insolvency
application for the application is decided upon, proceedings under the Code. A
recognition of the court may, at the request of moratorium in corporate
a foreign the foreign representative, insolvency resolution process
proceeding where relief is urgently needed only operates after admission of
to protect the assets of the application.
[Interim Relief] debtor or the interests of the
creditors, grant relief, including: Broad relief before an application
(a) Staying execution against the for recognition is admitted may
debtor’s assets; lead to unnecessary relief being
(b) Entrusting the administration or made available for proceedings
realization of all or part of the which may not fit within the
debtor’s assets located in this criterion for recognition.
State to the foreign
representative or another person
designated by the court, to
protect and preserve the value
of assets that, by their nature or
because of other circumstances,
are perishable, susceptible to
devaluation or otherwise in
jeopardy;
(c) Any relief mentioned in
paragraph 1 (c), (d) and (g) of
article 21.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation from the Model Law
heading Law and Reason

19. Relief that (2) Unless extended under Not incorporated -

may be paragraph 1 (f) of article 21, the
granted upon relief granted under this article
application for terminates when the application for
recognition of recognition is decided upon.
a foreign (3) The court may refuse to grant
proceeding relief under this article if such relief
would interfere with the
administration of a foreign main
proceeding
 Issues
1. Whether interim-relief should be provided in Part Z to the Code?

- There is no provision for interim-relief under corporate insolvency resolution process

under the Code. Providing interim-relief here may thus be inconsistent.
- May give too much discretion to the Adjudicating Authority.
- But in some cases, urgent relief may be required until recognition is granted.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

20. Effect of Article 20 Section 17 (1) To maintain consistency, the

recognition of (1) Upon recognition of a foreign (1) Upon recognition of a foreign main moratorium from section 14 of
a foreign main main proceeding: proceeding, a moratorium similar to the Code has been
proceeding (i) Commencement or continuation the one under section 14 of the Code incorporated.
of individual actions or proceedings shall be imposed.
[Key provision] concerning the debtor is stayed; (2) The scope and modification or
(ii) Execution against debtor’s termination of moratorium above are
assets is stayed; subject to section 14 of the Code.
(iii) Right to transfer, encumber or (3) The moratorium does not affect the
dispose assets of any assets of the right to request the commencement
debtor is suspended. of a proceeding under the Code or
(2) The scope and modification or the right to file claims in such a
termination, of the stay and proceeding.
suspension above are subject to
those applicable to stay and
suspension in domestic insolvency
law.
(3) The stay above does not affect
the right to commence individual
actions or proceedings to the extent
necessary to preserve a claim
against the debtor.
(4) The stay above does not affect
the right to request the
commencement of a proceeding
under domestic insolvency law or
the right to file claims in such a
 Issue
2. Whether the Adjudicating Authority should have the power to modify relief in section
20(1) of this Part for foreign main proceedings?
- According to the Guide to Enactment to the Model Law, it depends on the scope of
the domestic provision on moratorium:
“If courts are to be given such a power, some legal systems would normally require
the grounds on which the court could modify or terminate the mandatory effects of
recognition under article 20, paragraph 1 to be specified. In view of that situation,
article 20, paragraph 2, provides that the modification or termination of the stay
and the suspension provided in the article is subject to the provisions of law of the
enacting State relating to insolvency.”
- Section 14 of the Code is not subject to modification by the Adjudicating Authority.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

21. Relief that Article 21 Section 18 Relief relating to interim-relief has

may be (1) Upon recognition of a foreign
granted upon proceeding, whether main or non-
recognition of main, where necessary to protect
a foreign the assets of the debtor or the
proceeding interests of the creditors, the court
may, at the request of the foreign
representative, grant any
appropriate relief, including:
(a) Remedies in relation to stay,
beyond the extent provided in
article 20
(b) Providing for the examination of
witnesses, the taking of evidence or
the delivery of information
concerning the debtor’s assets,
affairs, rights, obligations
liabilities;
(c) Entrusting the administration or
realization of all or part of the
debtor’s assets located in this State
to the foreign representative or
another person designated by the
court;
(d) Extending relief granted under
paragraph 1 of article 19;
(1) Moratorium similar to section 14 of not been included since interim-
the Code has been provided, to the relief is not provided under this
extent it hasn’t been granted under Part.
section 17 of this Part.
(2) The scope and modification or
termination of the moratorium is
subject to section 14 of the Code.
(3) In granting relief under this section to
a representative of a foreign non-
main proceeding, the court must be
satisfied that the relief relates to
assets that, under the law of India,
should be administered in the foreign
non-main proceeding or concerns
information required in that
or proceeding.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law
21. Relief that (e) Granting any additional relief that
may be may be available to the insolvency
granted upon professional under the laws of this
recognition of State.
a foreign (2) Upon recognition of a foreign
proceeding proceeding, whether main or
nonmain, the court may, entrust the
distribution of all or part of the
debtor’s assets located in enacting
State to the foreign representative
or another person designated by the
court, that the interests of creditors
in this State are adequately
protected.
(3) In granting relief under this
article to a representative of a
foreign non-main proceeding, the
court must be satisfied that the relief
relates to assets that, under the law
of this State, should be administered
in the foreign non-main proceeding
or concerns information required in
that proceeding.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

22. Article 22 Section 19 References relating to

Protection of(1) In granting or denying relief The provision has been interim-relief have not been
creditors under article 19 or 21, or in incorporated with removal of included since interim-relief
and othermodifying or terminating relief, references to article 19. is not provided under this
interested the court must be satisfied that Part.
persons the interests of the creditors
and other interested persons,
[Reliefs may including the debtor, are
be modified] adequately protected.
(2) The court may subject relief
granted under article 19 or 21
to
conditions it considers
appropriate.
(3) The court may, at the
request of the foreign
representative or a person
affected by relief granted under
article 19 or 21, or at its own
motion, modify or terminate
such relief.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

23. Actions Article 23 Section 20 Reference to provisions

to avoid acts (1) Upon recognition of a (1) Subject to section 7 of this Part, relating to look back
detrimental foreign proceeding, the foreign upon recognition of a foreign provisions of the insolvency
to creditors representative has standing to proceeding, the foreign professionals has been
initiate actions to avoid or representative has standing to provided. It has been
[Avoidance otherwise render ineffective make an application under clarified that the foreign
Actions] acts detrimental to creditors sections 43, 45, 49, 50 and 66 representative shall be
that are available in the of the Code and he would have making the application
enacting State to domestic the same powers as a subject to section 7 of this
insolvency professionals. (2) resolution professional or Part (which may be through
When the foreign proceeding is liquidator making such domestic insolvency
a foreign non-main proceeding, application. professional).
the court must be satisfied that (2) When the foreign proceeding is
the action relates to assets a foreign non-main proceeding,
that, under the law of this the Adjudicating Authority shall
State, should be administered be satisfied that the action
in the foreign non-main relates to assets that, under the
proceeding. law India, should be
administered in the foreign non-
main proceeding.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

24. Article 24 Has not been incorporated. Scope of article 24 is broad

Intervention Upon recognition of a foreign and applies to any
by foreign proceeding, the foreign proceeding in which a debtor
representati representative may, provided is a party, which is not
ves in the requirements of the law of restricted to proceedings
proceedings this State are met, intervene in under the Code. This has not
in this State any proceedings in which the been included to avoid
debtor is a party. providing powers of the
foreign representative
beyond the Code.
 Issues
1. Whether a provision for intervention by the foreign representative, similar to article
24 of the Model Law, should be incorporated in Part Z?
- Scope of the article 24 is broad and applies to any proceeding in which a debtor is a
party, which is not restricted to proceedings under the Code.
- According to the Guide to Enactment to the Model Law, “The purpose of article 24 is
to avoid the denial of standing to the foreign representative to intervene in
proceedings merely because the procedural legislation may not have contemplated
the foreign representative among those having such standing.”
- If the foreign representative is an interested party in a litigation, he/ she will usually
be allowed to intervene in such proceeding.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

25. Cooperation Article 25 Section 21 (1) The enabling provision for

and (1) The court shall cooperate to (1) The Central Government in consultation direct communication
communication the maximum extent possible with the Adjudicating Authority, shall between foreign and
between a court with foreign courts or foreign notify guidelines for communication and domestic courts to the
cooperation between Adjudicating
of this State representatives, either directly Authority and foreign courts in the maximum extent possible
and foreign or through a an insolvency interest of all stakeholders. has been removed.
courts or foreign professional. (2) The Adjudication Authority may conduct (2) Relevant authority to be
representatives (2) The court is entitled to a joint hearing with another foreign notified to assist the
communicate directly with, or to court in a concurrent proceeding, and Adjudicating Authority in
request information or may communicate directly with, or communication with foreign
assistance directly from, request information or assistance courts.
foreign courts or foreign directly from foreign representatives.
representatives. (3) The Central Government shall notify the
relevant authority to assist the
Adjudicating Authority in facilitating
transmission of notices and other
communications between the
Adjudicating Authority and foreign
courts.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

26. Article 26 Section 22 No significant deviations.

Cooperation (1) A domestic insolvency Incorporated with reference made
and direct professional shall, in the to resolution professional or
communicati exercise of its functions and liquidator, as the case may be,
on between subject to the supervision of instead of domestic insolvency
the domestic the court, cooperate to the professional.
insolvency maximum extent possible
professional with foreign courts or
s and foreign representatives.
foreign (2) The domestic insolvency
courts or professional is entitled, in
foreign the exercise of its functions
representati and subject to the
ve supervision of the court, to
communicate directly with
foreign courts or foreign
representatives.
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

27. Forms of Article 27 Section 23 No significant deviations.

cooperation Cooperation referred to in Incorporated.
articles 25 and 26 may be
implemented by
any appropriate means,
including:
(a) Appointment of a person or
body to act at the direction of
the
court;
(b) Communication of
information by any means
considered appropriate by the
court;
(c) Coordination of the
administration and supervision
of the debtor’s assets and
affairs;
(d) Approval or implementation
by courts of agreements
concerning the coordination of
proceedings;
(e) Coordination of concurrent
Sr. No. and Contents of Provision in the Contents of Provision in Proposed Deviation and Reason
heading Model Law Part Z

28. Article 28 Section 24 No significant deviations.

Commence (1) After recognition of a Incorporated.
ment of a foreign main proceeding, a
proceeding domestic insolvency
under proceeding may be
domestic commenced only if the debtor
insolvency has assets in this State.
law after (2) The effects of the domestic
recognition insolvency proceeding shall be
of a foreign restricted to the assets of the
main debtor that are located in the
proceeding enacting State and, to the
extent necessary to implement
cooperation and coordination
under articles 25, 26 and 27, to
other assets of the debtor that,
under the law of this State,
should be administered in that
proceeding.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

29. Article 29 Section 25 (1) References to article 19

Coordination Where a foreign proceeding and a (1) Incorporated mostly similarly. deleted since no interim relief is
of a domestic insolvency proceeding are (2) If proceeding under the Code is provided under this Part.
proceeding taking place concurrently regarding commenced after recognition of (2) Review of proceedings under
under the same debtor, the court shall foreign proceeding or application for section 20 of this Part may be
domestic seek cooperation and coordination, recognition, any proceeding under necessary as it may impact the
insolvency law and the following shall apply: section 20 of this Part shall also be estate of the debtor. Similar
and foreign (a) When the proceeding in reviewed by the Adjudicating provision has also been provided
proceeding enacting State is taking place at Authority and any direction may be in Singapore and UK.
the time the application for given by the Adjudication Authority in
recognition of the foreign this regard.
proceeding is filed,
(i) Any relief granted under article
19 or 21 must be consistent
with the proceeding enacting
State; and
(ii) If the foreign proceeding is
recognized in enacting State as
a foreign main proceeding,
article 20 does not apply;
(b) When the proceeding in enacting
State commences after recognition,
or after the filing of the application
for recognition, of the foreign
proceeding,
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law
29. (i) Any relief in effect under article 19 - -
Coordination or 21 shall be reviewed by the court
of a and shall be modified or terminated
proceeding if inconsistent with the proceeding in
under enacting State; and
domestic (ii) If the foreign proceeding is a
insolvency law foreign main proceeding, the stay
and foreign and suspension referred to in article
proceeding 20(1) shall be modified or
terminated pursuant to article 20(2)
if inconsistent with the proceeding in
this State;
(c) In granting, extending or
modifying relief granted to a
representative of a foreign non-main
proceeding, the court must be
satisfied that the relief relates to
assets that, under the law of the
enacting State, should be
administered in the foreign non-main
proceeding or concerns information
required in that proceeding.
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law
30. Article 30 Section 26 No significant deviations.
Coordination In respect of more than one foreign Incorporated with removal of references
of more than proceeding regarding the same to article 19. References to article 19 have
one foreign debtor, the court shall seek been deleted since no interim
proceeding cooperation and coordination under relief is provided under this Part.
articles 25, 26 and 27, and the
following shall apply:
(a) Any relief granted under article
19 or 21 to a representative of a
foreign non-main proceeding
after recognition of a foreign
main proceeding must be
consistent with the foreign main
proceeding;
(b) If a foreign main proceeding is
recognized after recognition, or
after the filing of an application
for recognition, of a foreign non-
main proceeding, any relief in
effect under article 19 or 21 shall
be reviewed by the court and
shall be modified or terminated if
inconsistent with the foreign
main proceeding;
(c) If, after recognition of a foreign
non-main proceeding, another
foreign non-main proceeding is
 Sr. No. and Contents of Provision in the Model Contents of Provision in Proposed Part Z Deviation and Reason
heading Law

31. Article 31 Section 27 No significant deviations.

Presumption In the absence of evidence to the Incorporated with minor modification.
of insolvency contrary, recognition of a foreign
based on main proceeding is, for the purpose
recognition of of commencing a domestic
a foreign main insolvency proceeding proof that the
proceeding debtor is insolvent.
 Sr. No. and Contents of Provision in the Model Law
heading
32. Rule of Article 32
payment in Without prejudice to secured claims or
concurrent rights in rem, a creditor who has
proceedings received part payment in respect of its
claim in a proceeding pursuant to a law
relating to insolvency in a foreign State
may not receive a payment for the
same claim in a proceeding under
domestic insolvency law regarding the
same debtor, so long as the payment to
the other creditors of the same class is
proportionately less than the payment
the creditor has already received.
Contents of Provision in Proposed Part Z Deviation and Reason
Section 28 (1) Instead of class-wise distribution,
“(1) In a corporate insolvency resolution process the payment in corporate
under the Code, a creditor who has received insolvency resolution process is
part payment in respect of its claim in a based on the resolution plan.
proceeding pursuant to a law relating to
insolvency in a foreign State, may not receive a
payment for the same claim in such corporate
insolvency resolution proceeding regarding the
same corporate debtor, so long as the payment
to the other creditors of the same standing,
according to the resolution plan, is
proportionately less than the payment the
creditor has already received.
(2) In a liquidation proceeding under the Code,
without prejudice to secured claims or rights in
rem, a creditor who has received part payment
in respect of its claim in a proceeding pursuant
to a law relating to insolvency in a foreign State,
may not receive a payment for the same claim in
such liquidation proceeding regarding the same
corporate debtor, so long as the payment to the
other creditors of the same ranking is
proportionately less than the payment the
creditor has already received.