EFFICACY OF I.B.C. IN LIGHT OF ABSENCE OF THE CROSS- BORDER INSOLVENCY REGIME: A CRITICAL COMPARISON OF THE UNITED STATES, THE UNITED KINGDOM AND SINGAPORE APPROACH TO THE MODEL LAW
The Insolvency and Bankruptcy Code, 2016 (hereinafter “IBC” or the “Code”) is the extant law dealing with insolvency in India. While it may seem that by not addressing the issue of cross-border insolvency the Code’s efficacy may be questioned because it may not provide an immediate solution in cases of cross-border insolvency which involve the claims of the Indian corporations against the defaulting firms situated globally or the claims of financial persons situated globally having claims against the Indian firms. But, the stance that first, the domestic insolvency regime must prove effective to meet the challenges of time is also the other side which should not be ignored.
The present paper aims to delineate the important provisions of the UNCITRAL Model Law on Cross-Border Insolvency along with a study of a comparative approach of the United States, the United Kingdom, and Singapore which have adopted the Model Law in the year 2005, 2006, and 2017 respectively. The paper also critically analyses the Sections 234 and Section 235 of the IBC. Whether the adoption of the Model Law or ratifying an International Convention (yet to develop) is the road ahead for India or, altogether there can be the third approach is the cardinal focal point of the paper.
The central question of the paper is the solution that India may adhere to while addressing the need of incorporating provisions that deal with cross-border insolvency given the need of doing so in the near future due to increased foreign trade and investment and for the ease of doing business in India. The research paper does not focus on questioning the efficacy of the Code in the absence of the Cross-border insolvency, it rather suggests the recommendations that India can be mindful of while incorporating provisions dealing with the cross-border insolvency.