Steering through Cross-Border Insolvency Law: Insights from India’s Legal Landscape

The rapid advancement of trade and technology has significantly reduced the size of the world, fostering the rise of numerous multinational corporations that establish cross-border business relationships daily. This global business landscape inevitably leads to scenarios where debtors and creditors are situated in different jurisdictions, thereby triggering the application of diverse legal frameworks and the initiation of proceedings in multiple countries. Consequently, it becomes imperative to facilitate efficient asset recovery for creditors abroad and address the complex legal challenges associated with cross-border insolvency. This study meticulously explores the intricate aspects of cross-border insolvency within the Indian context. It traces the historical development of this legal domain, examines the relevant provisions of the Insolvency and Bankruptcy Code (IBC) of 2016, and critically evaluates their alignment with the UNCITRAL Model Law on Cross-Border Insolvency. The analysis extends to the practical implications of the Cross-Border Insolvency Rules of 2020 and the key provisions of Draft Z, which was prepared by the Insolvency Law Committee (ILC) based on the Model Law. Additionally, the study investigates the evolution of related legislation through recent judicial decisions. The author concludes by offering fundamental suggestions and recommendations to address the practical challenges within India’s insolvency regime and to bridge the gaps left by existing legislation.