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2021-12-doc3 Cross-border insolvency law in India

Would you like to think along with me and provide input in order to contribute to the draft text for the 5th edition of Wessels International Insolvency Law part I? For the idea behind this ‘deliberate public participatory drafting process’, see my blog of last week, at https://bobwessels.nl/blog/2021-12-doc1-book-on-international-insolvency-law-your-input-needed/. This first blog focuses on (legislative) developments in some 30 countries (outside of the EU, obviously these draft texts are rather short), in the blog at hand: India. I also look forward to comments on the draft text below, preferably soon, but on 15 January 2022 at the latest via: info@bobwessels.nl. The second half of January 2022 I hope to finalize the manuscript and send it to Wolters Kluwer’s editorial office. Below is the concept text:

[10061c] India. In 2016 India introduced its Insolvency and Bankruptcy Code (IBC 2016). It contains legal rules aiming at resolving issues in insolvency and bankruptcy law. It is a dynamic piece of economic legislation that proactively works towards reviving and restructuring companies in financial distress. Within a short period of three years, the Code has passed many litmus tests justifying its very purpose of enactment. The Code provides for the provisions pertaining to the corporate insolvency resolution process, fast track insolvency resolution process, liquidation, voluntary liquidation, personal guarantor’s insolvency and bankruptcy process, all in one Code.

Section 234(1) IBC 2016 provides that the Central Government may enter into an agreement with the Government of any country outside India for enforcing the provisions of this Code. In Section 234(2), the Central Government has the power, by notification in the Official Gazette, to direct the application of provisions of the IBC 2016 in relation to assets or property of corporate debtor, including a personal guarantor of a corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal arrangements have been made. It may require to be subject to such conditions as may be specified. Section 235(1) expresses that notwithstanding anything contained in the IBC or any law for the time being in force ‘… if, in the course of insolvency resolution process, or liquidation or bankruptcy proceedings, as the case may be, under this Code, the resolution professional, liquidator or bankruptcy trustee, as the case may be, is of the opinion that assets of the corporate debtor, including  a  personal  guarantor  of  a  corporate  debtor,  are  situated  in  a  country outside India with which reciprocal arrangements have been made under section 234, he may make an application to the Adjudicating Authority that evidence or action relating to such assets is required in connection with such process or proceeding’. The Adjudicating Authority may, on receipt of an application under section 235(1) and, on being satisfied that evidence or action relating to assets under sub-section (1) is required in connection with insolvency resolution process or liquidation or bankruptcy proceeding, issue a letter of request to a court or an authority of such country competent to deal with such request.

In November 2021 an invitation to comment on the topic of Cross-Border Insolvency under the IBC 2016 has been published, see https://ibbi.gov.in/webfront/Noticefor-Public-Comments-on-Cross-Border-Insolvency-241121.pdf.