CROSS-BORDER INSOLVENCY IN INDIA IN THE CONTEXT OF THE UNCITRAL MODEL LAW

Cross-border insolvency arises when an insolvent debtor has assets, creditors, business operations or insolvency proceedings connected with more than one jurisdiction. The central legal problem is not merely the existence of multiple proceedings, but the absence of a predictable mechanism for recognition, cooperation, coordination and protection of creditors across borders. India’s Insolvency and Bankruptcy Code, 2016 (IBC) initially addressed this problem through Sections 234 and 235, which depend on reciprocal arrangements and letters of request. These provisions do not create a comprehensive recognition-and-cooperation regime comparable to the UNCITRAL Model Law on Cross-Border Insolvency, 1997 (Model Law). This paper examines the architecture of the Model Law and evaluates India’s evolving approach. It analyses the four principal pillars of the Model Law—access, recognition, relief, and cooperation—and the distinction between foreign main and non-main proceedings based on the Centre of Main Interests (COMI) and establishment. It then examines India’s Insolvency Law Committee (ILC) Report of 2018, which proposed a new Part Z broadly based on the Model Law but with Indian modifications, followed by the Cross-Border Insolvency Rules/Regulations Committee (CBIRC) Report of 2020. Particular attention is given to reciprocity, public policy, foreign representatives, concurrent proceedings, court-to-court cooperation and the institutional role of the National Company Law Tribunal (NCLT). The paper also studies the practical lessons from Jet Airways, where the NCLAT had to facilitate cooperation between Indian and Dutch insolvency proceedings through a court-directed protocol; Videocon, which exposed the limits of using domestic group-insolvency tools to deal with foreign subsidiaries and foreign assets; and Byju’s, which illustrates the friction created when Indian and United States proceedings and enforcement measures interact without a comprehensive Indian cross-border recognition regime. Comparative analysis of Singapore and the United Kingdom demonstrates how Model Law-based legislation can provide structured recognition and cooperation mechanisms while preserving domestic insolvency priorities. The paper finally examines the legislative developments of 2025–2026. The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 proposed an enabling power to frame cross-border rules. The Lok Sabha Select Committee recommended that the basic tenets of the cross-border framework be codified directly in the Code. Parliament nevertheless enacted Section 240C through the Insolvency and Bankruptcy Code (Amendment) Act, 2026 as a rule-making power. The commencement notification dated 22 May 2026, however, brought only specified provisions into force from 26 May 2026 and did not include the provision inserting Section 240C. Thus, as of 29 September 2026, India has moved closer to a statutory framework but has not yet operationalised a full Model Law-style recognition regime. The paper proposes a calibrated framework: Model Law alignment with Indian safeguards, clear COMI rules, direct access for foreign representatives, automatic and discretionary relief, court cooperation protocols, specialised NCLT capacity, transparent reciprocity rules and legislative rather than purely delegated determination of core policy choices.