Cross-border insolvency cases: Government will soon put out for consultation the draft legal framework

The government will soon put out for consultation the draft legal framework for cross-border insolvency cases.

The Ministry of Corporate Affairs (MCA) and the Insolvency and Bankruptcy Board of India (IBBI) met on Thursday to finalise the contour of the framework to settle bankruptcy cases of companies that have business or operations in more than one country. "A final draft paper to be floated by the end of this month, outlining the legal framework for the cross-border insolvency," said a government official in the know.

Based on the feedback, the government will try and move a Bill to amend the Insolvency and Bankruptcy Code (IBC) in the upcoming winter session of Parliament.


The amended Code would empower insolvency professionals (IPs) and creditors to access assets outside India of corporate debtors, maximising the value for all stakeholders. Similarly, foreign creditors to an Indian entity become party to bankruptcy proceedings if the borrower goes bankrupt.

Sources privy to the meeting said there were discussions on the details of adopting a law based on the UNCITRAL Model Law on Cross-border Insolvency, 1997 and how it would be beneficial to Indian creditors.