Internationalising the IBC: Calibrating Indian Insolvency Landscape for Cross Border Insolvencies.

Abstract

Through the past three decades, the economic integration of India with the global value chain has drastically transformed. This surge has intricately woven domestic businesses into the global supply chain and thus exposed them to external influences. The Insolvency and Bankruptcy Code, 2016 (IBC) of India does not provide a comprehensive framework for effective cross-border bankruptcy administration, and the evolving jurisprudence has encountered difficulties, as demonstrated by the cases of Jet Airways, Bhushan Steel, and Go Airlines, highlighting the requirement for stronger cross-border procedures. The geopolitical factors, including the Russia-Ukraine conflict, the post-COVID recovery, and diminishing globalisation, have led to contemporary supply chain issues like increased freight prices, material scarcity, energy shortages, etc. Inevitably, insolvency cases with cross-border dimensions are bound to increasingly arise, necessitating a comprehensive framework to navigate these complexities under the IBC. The essay critically analyses the proposed addition of Draft Part Z to the IBC. The authors attempt a comparative study between the Draft Part Z and the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency based on the four main pillars of cross-border insolvency, i.e., access, recognition, relief, and cooperation. The essay deals with each of these pillars in detail and identifies the issues arising and possible solutions to the same. First, the essay discusses the issue of temporality in cross-border insolvency and then the scope of public policy considerations to refuse recognition of foreign proceedings. Further, arguments are made for the incorporation of provisions for interim relief in cross-border insolvency cases. Finally, the authors analyse problems related to the enforcement of insolvency-related judgments in the proposed scheme, and after analysing the inherent powers of the NCLT, it is recommended that a specific provision enabling enforcement of insolvency-related judgments be incorporated into Draft Part Z.