Board paper calls for UN-model cross-border insolvency law

financialexpress.com:

India should “absolutely” consider the adoption of the UNCITRAL Model Law on Cross-Border Insolvency (MLCBI) in the next version of its IBC, and mull ways to accelerate its domestic insolvency processes, a paper released by the Insolvency and Bankruptcy Board of India (IBBI) has said.

Currently, the Insolvency and Bankruptcy Code (IBC) has no instrument to restructure firms involving cross-border jurisdictions. Cross-border insolvency law aims to ensure Indian lenders have access to overseas assets of stressed companies, and can get support of foreign jurisdictions to bring defaulters’ assets there under the ambit of insolvency resolution.

The necessary amendments to the IBC have been under preparation for long, but haven’t yet been enacted.

The paper, titled, ‘Thinking Beyond Borders: Cross-Border Insolvency in IBC 2.0’, added that, in addition, the country ought to speed up its domestic insolvency processes, along with ways to incorporate mediation and alternative dispute resolution procedures into both domestic and cross-border cases.

According to the authors, however, the proposed model law is not a holistic solution to the problems of cross-border insolvencies. Instead, India should view it one brick in the all of cross-border structures and frameworks.

The Ministry of Corporate Affairs in 2020 had constituted the Cross Border Insolvency Rules/Regulations Committee (CBIRC), which was asked to propose the regulatory framework that would enable the implementation of cross-border insolvency mechanism, based on the lines of UNCITRAL models. In December 2021, the committee had submitted its report, which incorporated a set of draft guidelines, titled ‘Part Z’, regarding cross-border insolvency, but the proposals are yet