Author: Lena Navas
Course: BBA LLB (Hons), 4th Year
University: Lovely Professional University, Punjab
Abstract
The globalization of trade, finance, and investment has resulted in a highly interdependent economic system, whereby corporate debtors operate in multiple jurisdictions and creditors are dispersed around the world. These changes have increased the need for robust legal regimes governing cross-border insolvency that are efficient, predictable, and fair to all parties involved. India, as a leading or developing economy with increasing foreign investment and outbound corporate activity, has considerable challenges in this regard. While the Insolvency and Bankruptcy Code, 2016 (IBC) has simplified insolvency resolution within the country, there are no provisions for the recognition or coordination of foreign proceedings, foreign representatives’ access, or multi-jurisdictional insolvencies.
This research paper assesses the competing theoretical frameworks of universalism, which advocates centralized cross-border insolvency proceedings in accordance with the debtor’s center of main interest (COMI), and territoriality, which prefers local jurisdictional control over assets. By contextualizing India’s legislative framework, including the proposed Draft Part Z, the research article considers the legal, economic, and policy significance of adopting a universe-orientated model based on internationally accepted standards.
Comparing the United Kingdom, United States, and Singapore illustrates how these regimes implement cross-border insolvency frameworks to optimize creditor rights, judicial economy, and public policies. Drawing on the case law, policy papers, and investigative studies regarding Indian companies in distress, such as Jet Airways, Essar Steel, and Bhushan Steel, the paper points out the limitations of the current approach in Indian insolvency law and reform opportunities.
The model law under UNCITRAL is a pragmatic tool to sync domestic insolvency law with best practices, build investor confidence, defend creditors’ rights, and promote international cooperation. Cross-border insolvency law can serve as a mechanism to support India’s integration into international financial systems while safeguarding national interests and supporting sustainable corporate governance.
Keywords: Cross-Border Insolvency, Universalism, Territoriality, UNCITRAL Model Law, Insolvency and Bankruptcy Code (IBC), Draft Part Z, Creditor Protection, Judicial Cooperation.
I. Introduction
A. Background and Significance
Cross-border insolvency has taken centre stage in global corporate governance and international finance. As companies start to operate globally, they will likely have assets and liabilities in a number of different jurisdictions, which will also mean that their creditors—banks, bondholders and suppliers, for example—could also be located in the same or different jurisdictions. The point in question is that, in practice, insolvency proceedings cannot just be seen as a domestic issue. Cross-border insolvency is significantly more complicated; it introduces multiple systems of law and raises challenging jurisdictional issues and matters of recognition of ownership rights, and protections of creditors’ claims. Getting the right balance among efficiently, fairly and sovereign, is particularly difficult with fast-growing economies that attract foreign investment, such as India.
India’s ascendance as a global economic powerhouse has led to its deeper integration into international commerce and international finance. An Indian corporation may have subsidiaries abroad, bank accounts and assets abroad, just as foreign investors may own equity stakes in Indian businesses. This dynamic alone means that insolvency processes will often be cross-border. The Insolvency and Bankruptcy Code, 2016 (IBC) has been introduced in order to streamline domestic insolvency; the code is time-limited and focuses on creditor’s rights. At the same time, the 2016 IBC has fundamentally focused on domestic insolvency proceedings, and has no provisions for recognizing foreign proceedings or proposing a system to coordinate with foreign courts for the same goal.
Real-world situations highlight the necessity for reform. Cases such as Jet Airways, in which creditors and assets were situated in more than one jurisdiction, demonstrated the IBC’s inadequacies in expediting claims on an international basis. Essar Steel and Bhushan Steel both contained complex cross-border transactions involving foreign creditors, which created challenges due to the lack of an adequate mechanism to simplify proceedings and make the outcomes fair to all parties. Collectively, these scenarios demonstrate the need for cross-border insolvency framework in India.
B. Theoretical Context: Universalism vs. Territoriality
The field of international insolvency law is based on two competing paradigms: universalism and territoriality. These paradigms have differing viewpoints on sovereignty, creditor protection, and judicial efficiency, and understanding them is critical to defining India’s approach to international insolvency if and when the regulation of participatory businesses and creditors continues to experience growth across the globe.
1. Universalism
Universalism promotes single jurisdiction for insolvency proceedings, and usually in the center of main interest (COMI) of the debtor. Other jurisdictions are expected to recognize and cooperate with that primary proceeding, through accessing the foreign proceeding, participating in the foreign proceeding, and adjudicating matters related to the foreign proceeding for the purpose of coordinating the administration process for the debtor’s estate.
Pros of Universalism:
- Efficiency: A single proceeding avoids having to go through two different insolvency processes. This makes it quicker to facilitate claims, sell assets, and then distribute them, as there are no duplicative proceedings in multiple jurisdictions.
- Predictability: Creditors get the same treatment regardless of where they sit because their claims are all being decided in one jurisdiction. These further limits disposition provisions between different legal systems.
- Cost Effective: A single proceeding is better for creditors because there is much less to pay regarding the legal and administrative processes associated with the foreign process.
- Judicial Cooperation: Courts can share documents and evidence, take in account scheduling, and coordinate scheduling related to the disputes in which foreign creditors seek to participate.
Real-Life Example: An excellent example of the universalism’s paradigm at work is the Singapore’s Cross-Border Insolvency Act of 2016. This act allows any foreign state or proceeding to be recognized by the Singaporean legal system, allows the foreign representatives in Singapore to facilitate and participate in the insolvency proceeding, and also creates remedies so the representative can move toward preserving the assets of the debtor. Singapore has developed its legal system into a regional hub for cross-border insolvency cases, allowing foreign corporations to rely on the predictability of using their system for insolvency cases (Norton Rose Fulbright, 2024).
Drawbacks:
Universalism may conflict with local sovereignty, particularly if a foreign insolvency process is inconsistent with domestic protection or public policy. A basic assumption—that one jurisdiction can deal with insolvency across distinct legal and economic contexts—may become problematic, especially in countries with precise corporate or creditor hierarchy laws.
2. Territoriality
Territoriality favours each jurisdiction’s control over property located within its territory. Jurisdictions will often administer insolvent estates involving domestic assets without regard to any foreign proceedings, and will recognize any foreign administration provisionally or not at all.
Benefits of Territoriality (note caveats below):
- Control Over Sovereignty: Jurisdictions preserve their power over domestic assets, responding to local legal and economic obligations.
- Alignment With Local Policy: Local laws govern the treatment of creditors to protect social, political, or economic considerations.
Example: The United Kingdom utilizes a largely territorial framework under the Cross-Border Insolvency Regulations 2006, recognizing foreign proceedings on a selective basis, with domestic courts having the ability to prefer local creditors or public policy (UK Practical Law, 2024).
Penalties:
Operative territoriality often leads to parallel proceedings and raises the costs of administration. The debtor’s foreign creditors may receive different percentages of their claims, depending upon foreign debt negotiation laws or methods of asset valuation. Territorialism also creates the ability to forum shop, in which the debtor “chooses” his forum because it offers rights and privileges that other other courts may not have, reducing fairness and effectiveness.
3. Hybrid Model
There is a growing trend in modern insolvency law to develop a hybrid model that draws on the administrative efficiency associated with universalism while furnishing safeguards associated with territorialism.
This model seeks to:
- recognize foreign representatives or proceedings and to provide for international cooperation.
- protect local stakeholder interests, including creditor priorities, public policy concerns, and sovereign interests
- coordinate concurrent proceedings, in a way that minimizes duplication in legal proceedings, while allowing for exercise of discretion by the local courts if circumstances warrant.
Hybrid models can be distinguished in jurisdictions such as the United States of America (Chapter 15), which recognizes the existence of foreign main proceedings, but which allows the local courts to decline recognition if the foreign proceedings are against the public policy of the domestic jurisdiction and the United Kingdom which impose a hybrid model by recognizing foreign proceedings to/middle while still preserving some local component.
For India, implementing a hybrid model through Part Z of the Draft would allow India to adopt the best global practices while protecting some local stakeholders. As described above, the adoption of core principles of the hybrid model would allow India to develop a cross-border insolvency framework that is cognizable internationally while locally and credibly remaining robust.
4. Critical Discussion
The preference for either universalism or territoriality is not just theoretical, but has far-reaching consequences in terms of corporate governance, creditor rights, and investor confidence. Universalism may improve international investment and predictability, but if there is too much reliance on foreign proceedings, a domestic legal sovereignty could be jeopardized. Territoriality preserves local control and law, but could promote inefficiency or an inequitable outcome for creditors. As a result, hybrid models are a reasonable compromise, which allow India to operate under a process that is aligned with international standards – all the while being flexible in protecting domestic interests.
In addition, from the available empirical evidence, countries that adopt hybrid frameworks inspired by UNCITRAL achieve better recovery rates and quicker resolution for cross-border insolvencies. For India, where the judiciary routinely suffers from backlog, limited resources, and procedural delays, a hybrid framework custom fit for longevity, enforcement, and fairness could meaningfully increase efficiency, reduce litigation expenses, and bolster the confidence in a domestic insolvency process.
5. Indian Case Studies and Cross-Border Insolvency
India’s engagement with cross-border insolvency remains limited but illustrative, particularly in high-profile corporate failures featuring foreign creditors, foreign assets, and/or cross-border operations. These corporate failures illustrated tensions associated with achieving equitable treatment of creditors in a universalist versus territorial practice.
a. Jet Airways
Background: Jet Airways was formerly India’s largest private airline when it became insolvent in 2019, and it also had complicated debt obligations in India and other jurisdictions. The airline had domestic debt obligations to domestic banks, aircraft leased from foreign lessors, loans from foreign banks, and suppliers spread across Indonesian, Dutch, and multiple other jurisdictions.
Analysis:
- The IBC process permitted domestic creditors to initiate the Corporate Insolvency Resolution Process (CIRP).
- Nonetheless, foreign lessors and international financiers had limited rights to participate and were treated differently in terms of rights to vote on domestic insolvency proceedings, evidencing India’s territorial approach towards some aspect of asset recovery.
- Importantly, there wasn’t any consideration of formally recognized foreign proceedings, especially in coordinated response to Indian domestic proceedings, contributing to uncertainty for Indian and foreign creditors.
- A universally recognized framework, such as is proposed in Draft Part Z, could have allowed for the recognition of the foreign creditors’ rights to formally respond to domestic proceedings, giving a substantive voice in the process, and hopefully achieving a more coordinated process.
b. Essar Steel
Background: Essar Steel experienced one of the most significant insolvency proceedings in India under the IBC involving substantial foreign debt, mainly from banks in Europe and Asia.
Analysis:
- The Essar Steel scenario highlighted the limitations of the IBC’s capacity to address cross-border implications, particularly in respect of the recognition of foreign lenders and their respective claims.
- While domestic creditors were represented effectively in the coordination between the courts, there was no meaningful formal mechanism that would permit the introduction of foreign proceedings or judicial orders.
- The Essar Steel case raised issues of creditor hierarchy, specifically that foreign lenders sometimes had claims making them superior to domestic priority structures. Essentially, this is a classic issue of territorialism.
c. Bhushan Steel
Background: The Bhushan Steel insolvency also involved substantial foreign debt and foreign assets alongside domestic creditors. International banks, some headquartered in Europe, had significant exposure in the Bhushan Steel insolvency process.
Analysis:
- The courts in India focused on purely domestic claims, which was also consistent with the principles of territorialist jurisprudence.
- Foreign banks did not have formal opportunities to enforce their claims or have their input in management.
- One important feature of the process is the resolution did not include a specific mechanism for India’s legal framework to facilitate cooperation with foreign courts, which limited coordination and created uncertainty.
- A hybrid response to the situation considering universal recognition of foreign court proceedings coupled with domestic creditor protections could have expedited the resolution, limited litigation, and provided opportunity for asset recovery sooner.
d. Available implications for Draft Part Z
The provision for Draft Part Z opens up a means for addressing some concerns with regard to:
- Formal Recognition of Foreign Proceedings: Affords foreign creditors and representatives their place in domestic Indian insolvency proceedings.
- Coordination Mechanisms: Intends to permit the court to communicate and cooperate with the foreign jurisdictions so as to eliminate duplication of proceedings.
- Confirmation of Domestic Creditor Rights and Priorities: Provisions that will maintain domestic protections while allowing foreign parties to participate reflect a hybrid approach.
- Judicial Precedent Development: The exposure of Indian courts to adjudication of cross border cases in a clear legislative framework would allow for judicial expertise to develop resulting in reduced delays and improved efficiencies.
C. India’s Legislative Evolution
India’s insolvency framework has undergone rapid evolution in the last thirty years, signifying the growth in its economy and the complexity of insolvency as a result of corporate finance. Prior to 2016, corporate insolvencies predominantly fell under the regulatory ambit of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) with the main aim of facilitating the identification and revival of sick industrial units. However, SICA was a largely unsuccessful legal mechanism characterized by a lengthy and convoluted set of procedures, low creditor recovery rates, and very limited guidance on the primacy of claims, rights of creditors, or the potential for asset liquidation. Notably, it primarily concerned itself exclusively with sick industrial companies and did not have any means to consider individual or partnership insolvencies. In combination, this rendered India’s insolvency ecosystem somewhat dysfunctional.
The advancement of cross-border trade/investment and expansion of multinationals underscored another set of shortcomings. Indian companies were actively engaging in offshore financing, acquiring overseas assets, and had creditor relationships outside India; yet, there was no corresponding mechanism for recognizing foreign insolvency proceedings/acts, or the coordination of resolution of insolvency in the different jurisdictions. The limitations of SICA, and other discrete statutes (including the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Companies Act 1956/2013) highlighted the need for a comprehensive legal, modernized insolvency framework.
The Insolvency and Bankruptcy Code (IBC), 2016 marked a paradigm shift. It introduced a time-bound Corporate Insolvency Resolution Process (CIRP), mandating resolution within 180 days, extendable by 90 days under specific conditions. The IBC strengthened domestic insolvency mechanisms but remained largely territorial, focusing on Indian companies with domestic creditors. Cross-border claims and foreign creditors were inadequately addressed, as seen in corporate failures like Jet Airways, Essar Steel, and Bhushan Steel, where lack of recognition for foreign proceedings caused delays, litigation, and uncertainty.
To address these gaps, the Insolvency Law Committee (ILC) proposed Draft Part Z in 2018, drawing on the UNCITRAL Model Law on Cross-Border Insolvency. Draft Part Z aims to modernize India’s insolvency regime through:
- Recognition of Foreign Proceedings: Indian courts may recognize foreign main and non-main proceedings.
- Access for Foreign Representatives: Foreign representatives can participate in Indian proceedings, protecting international creditors’ interests.
- Relief and Coordination: Courts may grant interim relief, such as injunctions or stays, and coordinate with foreign courts to avoid duplicative actions.
- Concurrent Proceedings Management: Mechanisms to harmonize resolution across multiple jurisdictions.
Currently, Draft Part Z applies only to corporate debtors, excluding individuals, partnerships, and family-owned businesses. India also lacks fully developed judicial infrastructure and expertise for complex cross-border insolvency, highlighting the need for training programs and institutional capacity building.
Adopting the UNCITRAL framework through Draft Part Z positions India alongside leading jurisdictions such as the US (Chapter 15), UK (Cross-Border Insolvency Regulations 2006), and Singapore (Cross-Border Insolvency Act 2016). This alignment can:
- Facilitate Foreign Investment: Predictable legal frameworks encourage global investors.
- Enhance Judicial Credibility: Expertise in cross-border insolvency improves efficiency and reduces litigation delays.
- Strengthen Economic Stability: Efficient resolution preserves asset value and supports timely corporate restructuring.
- Harmonize International Legal Cooperation: Recognition and coordination mechanisms reduce conflicts and duplicative proceedings.
In conclusion, India’s legislative evolution reflects a transition from fragmented, territorial statutes to a modern, creditor-centric, and internationally compatible framework. While the IBC effectively addresses domestic insolvency, adopting Draft Part Z and UNCITRAL principles is essential for managing cross-border insolvency in the 21st-century global economy, strengthening India’s legal infrastructure, and enhancing its role in international financial and investment systems.
D. Objectives of the Paper
This paper seeks to:
- Examine the theoretical paradigms of universalism and territoriality in cross-border insolvency.
- Evaluate India’s current legal framework and the proposed Draft Part Z.
- Conduct a comparative analysis with the UK, US, and Singapore, highlighting lessons for India.
- Critically assess challenges and opportunities in adopting the UNCITRAL Model Law, with recommendations for effective implementation.
By providing this analysis, the paper argues that a hybrid adoption of universalist principles with territorial safeguards can enhance judicial efficiency, improve creditor protection, and align India with global insolvency standards, ultimately supporting economic stability and investor confidence.
IV. Comparative Analysis
A. United Kingdom
The United Kingdom, as a global financial centre, requires a cross-border insolvency framework capable of addressing international corporate distress. The Cross-Border Insolvency Regulations 2006 incorporate principles of the UNCITRAL Model Law, creating a hybrid system that blends universalist recognition of foreign proceedings with territorial safeguards to protect domestic policy.
Case Example: Singularis Holdings Ltd v PricewaterhouseCoopers (2014) illustrates this hybrid approach. The UK Supreme Court recognized foreign liquidation proceedings of a BVI entity, granting relief to foreign representatives while ensuring UK creditors’ rights were protected in line with domestic public policy. The case highlights the need to balance centralized efficiency with protection of local stakeholders.
The UK model demonstrates that hybrid frameworks can maximize creditor recovery, prevent duplicative litigation, and maintain investor confidence, while preserving legislative sovereignty. By combining universalist mechanisms with territorial safeguards, the UK effectively manages competing priorities in cross-border insolvency.
B. United States
The United States integrated the UNCITRAL Model Law into domestic legislation through Chapter 15 of the Bankruptcy Code, allowing foreign main proceedings to be recognized while retaining discretion to deny recognition where public policy conflicts arise.
Case Example: In re Nortel Networks (2012) involved simultaneous insolvency proceedings in Canada, the US, and the UK. Under Chapter 15, the US Bankruptcy Court coordinated with foreign courts to consolidate claims, avoid duplicative litigation, and efficiently allocate debtor assets. Foreign representatives were granted access to participate, facilitating communication and harmonization across jurisdictions. The US example underscores the benefits of a hybrid framework, combining universalist coordination with territorial safeguards.
C. Singapore
Singapore exemplifies a universalist approach. The Cross-Border Insolvency Act (2016) fully recognizes foreign main proceedings, allows foreign representatives access to domestic courts, and promotes cooperation with foreign jurisdictions.
Effectiveness: Singapore’s framework enhances:
- Predictability: Multinational investors have clear guidance on cross-border claims.
- Judicial Efficiency: Streamlined procedures reduce litigation delays and administrative costs.
- Economic Competitiveness: A transparent insolvency regime positions Singapore as a regional hub for corporate restructuring and asset recovery.
Singapore demonstrates that universalism, supported by strong legal infrastructure and effective judicial administration, can generate significant economic benefits and attract global investment.
D. Comparative Lessons for India
Comparing these jurisdictions provides several insights for India:
- Universalist Elements Enhance Efficiency: Recognition of foreign proceedings, access for foreign representatives, and coordinated relief reduce duplication, costs, and delays—critical in India, where judicial backlogs are significant.
- Territorial Safeguards Protect Domestic Interests: Courts must retain discretion to deny recognition where public policy conflicts arise, ensuring domestic creditors and statutory protections are preserved.
- Hybrid Frameworks Are Optimal: Pure universalism risks subordinating local creditors, while strict territorialism impedes cross-border coordination. A hybrid model allows India to combine recognition mechanisms, domestic safeguards, and judicial cooperation protocols.
- Institutional Capacity Matters: India requires specialized judicial expertise, robust procedural rules, and stakeholder awareness to manage complex cross-border insolvencies effectively.
- Investor Confidence: Aligning with global best practices reduces legal uncertainty, fostering trust among foreign creditors and investors.
- Economic and Policy Implications: Efficient cross-border insolvency frameworks support corporate restructuring, prevent asset value erosion, and stabilize financial markets. For India, adopting a UNCITRAL-inspired hybrid framework is both a legal necessity and a strategic economic imperative.
V. Challenges and Opportunities
A. Challenges
- Judicial Capacity and Expertise
- Indian courts have strong domestic insolvency experience but limited exposure to cross-border cases.
- Handling foreign claims, interpreting international laws, and coordinating with overseas courts requires specialized training and expertise.
- Without this, cases may face delays, inconsistent rulings, and uncertainty for creditors.
- Legal Harmonization
- Integrating UNCITRAL Model Law principles into the IBC is complex.
- Issues include:
- Access and participation of foreign representatives.
- Coordinating parallel proceedings in India and abroad.
- Recognition of foreign judgments and orders.
- Draft Part Z is limited to corporate debtors, leaving individual and partnership insolvency unaddressed.
- Sovereignty and Public Policy Concerns
- Recognition of foreign proceedings may conflict with domestic laws protecting local creditors, employees, or regulatory interests.
- Courts must balance efficiency (universalism) with domestic protections (territoriality).
- Excessive recognition could disadvantage Indian stakeholders; restrictive recognition may deter foreign investment.
- Institutional Readiness
- Effective cross-border insolvency requires coordination mechanisms, procedural clarity, and stakeholder awareness.
- Lack of infrastructure could lead to protracted litigation, higher costs, and inefficient resolutions.
B. Opportunities
- Global Integration
- UNCITRAL-based Draft Part Z allows India to align with international insolvency standards.
- Harmonized laws facilitate cross-border trade and investment, ensuring predictable treatment of foreign and domestic creditors.
- Enhanced Investor Confidence
- Transparent and consistent legal frameworks attract FDI and multinational corporations.
- Investors gain confidence that claims will be handled fairly, efficiently, and equitably, even across jurisdictions.
- Economic Growth and Market Stability
- Efficient insolvency resolution preserves asset value, reduces financial uncertainty, and enables corporate restructuring.
- Stable credit markets encourage lending and investment, supporting domestic and international economic activity.
- Judicial and Professional Capacity Building
- Implementing Draft Part Z creates opportunities for specialized judicial training and skill development for insolvency professionals.
- Expertise in cross-border cases strengthens India’s legal credibility and ability to coordinate with foreign jurisdictions.
- Legal Modernization and Policy Innovation
- Adopting UNCITRAL principles allows India to modernize its insolvency framework.
- Provides a flexible, globally compatible regime that balances international standards with domestic protections.
- Enables India to emerge as a regional hub for cross-border corporate insolvency, similar to Singapore.
VI. Case for UNCITRAL Model Law Adoption
1. Internationally Recognized Framework:
Adopting the UNCITRAL Model Law provides India with a globally accepted framework for cross-border insolvency, aligning it with leading jurisdictions such as the US, UK, and Singapore. This ensures predictable processes when handling debtors or creditors across multiple countries.
2. Enhanced Investor Confidence:
A UNCITRAL-aligned framework boosts investor trust by ensuring foreign and domestic creditors are treated fairly and predictably, making India more attractive for foreign direct investment (FDI).
3. Judicial Cooperation:
The Model Law enables coordination between Indian and foreign courts, allowing recognition of foreign proceedings, access for foreign representatives, and interim relief. This reduces duplicative litigation and ensures equitable treatment of creditors.
4. Hybrid Approach for India:
A hybrid model combines universalist efficiency with territorial safeguards, protecting domestic creditors and public policy interests, making it suitable for India’s legal and economic context.
VII. Recommendations
1. Expand Coverage:
Extend Draft Part Z to include individuals, partnerships, and family-owned businesses, ensuring comprehensive application of cross-border principles.
2. Enforcement of Foreign Judgments:
Establish clear mechanisms for implementing foreign insolvency orders, including asset preservation, injunctions, and claim settlements.
3. Safeguard Domestic Creditors:
Maintain statutory priorities, protect employee rights, and ensure public policy safeguards while recognizing foreign proceedings.
4. Judicial and Professional Capacity:
Introduce specialized training for judges and insolvency professionals, and consider dedicated cross-border insolvency benches.
5. Stakeholder Awareness:
Educate creditors, debtors, and practitioners on rights, obligations, and procedures to reduce disputes and increase confidence.
6. Monitoring and Review:
Implement mechanisms to assess Draft Part Z’s effectiveness post-implementation and refine policies as needed.
VIII. Conclusion
Cross-border insolvency in India presents a complex legal and economic challenge, requiring a careful balance between universalist principles, which promote efficiency and predictability, and territorial safeguards, which protect domestic creditors and public policy. The adoption of the UNCITRAL Model Law through Draft Part Z offers India a significant opportunity to modernize its insolvency framework and align it with international best practices. By recognizing foreign proceedings, facilitating judicial cooperation, and providing clear mechanisms for enforcement, India can enhance judicial efficiency, reduce procedural delays, and ensure fair treatment of creditors across borders.
Moreover, strategic implementation of Draft Part Z can strengthen investor confidence by signaling a commitment to globally recognized legal standards, thereby attracting foreign direct investment and supporting corporate restructuring. Critical measures, including judicial capacity building, stakeholder awareness programs, and the establishment of procedural safeguards, will ensure that domestic interests are protected while enabling seamless integration with international insolvency processes.
By adopting a hybrid approach, combining the efficiency of universalism with the protective mechanisms of territoriality, India can position itself as a credible hub for cross-border insolvency resolution. Such reform not only enhances the legal infrastructure but also contributes to broader economic stability and growth, facilitating efficient asset recovery, minimizing value erosion, and promoting a transparent business environment. In sum, the timely enactment and effective implementation of Draft Part Z can transform India’s insolvency landscape, making it both globally competitive and domestically robust.
IX. References
- Insolvency and Bankruptcy Code, No. 31, Acts of Parliament, 2016 (India).
- UNCITRAL Model Law on Cross-Border Insolvency, U.N. Doc. A/RES/52/158 (1997).
- Cross-Border Insolvency Regulations 2006 (U.K.).
- 11 U.S.C. § 1501 et seq. (Chapter 15 Bankruptcy Code, United States).
- Cross-Border Insolvency Act 2016 (Singapore).
- Insolvency Law Committee, Report on Cross-Border Insolvency, 2018.
- Singularis Holdings Ltd v PricewaterhouseCoopers, [2014] UKSC 36.
- In re Nortel Networks Inc., 669 F.3d 128 (3d Cir. 2012).
- Norton Rose Fulbright, Singapore – A Model Law Jurisdiction, 2024, https://www.nortonrosefulbright.com.
- UK Practical Law, Cross-Border Insolvency: Recognition of Foreign Proceedings, 2024, https://uk.practicallaw.thomsonreuters.com.
