IBBI bats for cross-border insolvency framework

Mital said the proposed cross-border bankruptcy framework designed on the basis of a UN model law, will empower insolvency professionals and help in tracking down ‘avoidance transactions’ or past deals of defaulting companies which undermine the interests of creditors and other stakeholders. It will also help in achieving the IBC goal of maximising the value of distressed assets, Mital said in the update posted on the website of IBBI.

“Once enacted, the cross-border framework will provide a robust, principle-based framework that Indian and foreign stakeholders can invoke to resolve cross-border insolvency situations swiftly in a more efficient manner,” Mital said.

Presently, the ministry of corporate affairs is preparing amendments to the IBC. The idea is to include a new chapter on cross-border insolvency in the Code. The proposed amendments are expected to be taken to the Parliament shortly.

Adoption of cross border insolvency regime by India will be viewed as a progressive and forward-looking market reform by global investors and advanced jurisdictions, said Mital. The proposed amendments incorporate feedback from two rounds of public consultation. At present, cross border insolvency is handled by cooperation among bankruptcy courts in India and other countries. In the case of Jet Airways, Indian and Dutch authorities cooperated to resolve the bankruptcy.