Cross-Border Insolvency Regime in India: A Comprehensive Analysis

Cross Border Insolvency is the process where an insolvent debtor or a company having financial losses have assets or their operation in more than one jurisdiction or country. Cross Border Insolvency is primarily focused on the operation of insolvency beyond the domestic insolvency proceedings of a country. The United Nations Commission on International Trade Law (UNCITRAL) has developed the Model Law on Cross-Border Insolvency, which provides a framework for countries to harmonize their insolvency laws and facilitate cooperation between different jurisdictions. It is important to note that the UNCITRAL Model Law is not binding, and each jurisdiction has the discretion to adopt, modify, or reject its provisions, however India has not ratified the same. In India the Insolvency and Bankruptcy Code of 2016 governs the insolvency procedure in India but it does not provide sufficient framework for cross border insolvency. Due to this, the procedure involving insolvency of companies with multiple jurisdiction can be challenging. This article mainly deals with the issues and challenges which companies face during cross border insolvency and also provide the legislative developments for making the insolvency proceedings much easier.