The rapid growth of global trade, foreign investment, and multinational corporate structures has significantly increased the importance of effective cross-border insolvency mechanisms. In an interconnected economy, corporate debtors frequently hold assets, creditors, and business operations across multiple jurisdictions. When such entities become insolvent, purely domestic insolvency laws prove insufficient to address issues of jurisdiction, recognition of foreign proceedings, coordination between courts, and enforcement of orders. The need for a predictable and cooperative international insolvency framework has therefore become essential to ensure fairness, efficiency, and value maximization.

In India, the Insolvency and Bankruptcy Code, 2016 (IBC) marked a transformative reform in domestic insolvency law. It consolidated previously fragmented statutes, introduced time-bound resolution processes, and strengthened creditor rights. While the IBC has significantly improved India’s insolvency landscape internally, it does not contain a comprehensive statutory regime for cross-border insolvency. As Indian companies increasingly operate internationally and foreign investors participate in Indian markets, insolvency cases often involve overseas assets and stakeholders. In such circumstances, legal uncertainties arise regarding the recognition of foreign insolvency proceedings, cooperation between Indian and foreign courts, and protection of creditors’ interests across jurisdictions. The IBC addresses cross-border insolvency only through Sections 234 and 235. Section 234 empowers the Central Government to enter into reciprocal agreements with foreign countries to enforce IBC provisions, while Section 235 allows Indian adjudicating authorities to issue letters of request to foreign courts for assistance. However, these provisions are limited in scope and largely ineffective in practice.

They depend on bilateral agreements, none of which have been meaningfully operationalized. The absence of procedural clarity and enforceable reciprocity renders these sections inadequate for addressing complex multinational insolvency cases. A significant gap in India’s framework is its non-adoption of the UNCITRAL Model Law on Cross-Border Insolvency. The Model Law, adopted by numerous jurisdictions worldwide, provides a structured system for recognition of foreign proceedings, cooperation between courts, and coordination of concurrent insolvency processes. It does not harmonize substantive insolvency laws but establishes procedural mechanisms that promote efficiency and fairness in cross-border cases.

Countries such as the United States, United Kingdom, and Singapore have incorporated the Model Law into their domestic legislation. Their experience demonstrates that a codified framework enhances predictability, reduces jurisdictional conflicts, safeguards creditor interests, and strengthens investor confidence. By contrast, India’s reliance on limited statutory provisions and ad hoc judicial cooperation creates uncertainty and potential delays in asset recovery and

resolution.

With the increasing globalization of Indian businesses and financial markets, reform is both necessary and urgent. Incorporating a structured cross-border insolvency chapter into the IBC, aligned with international best practices, would improve judicial cooperation, protect stakeholder interests, and align India’s insolvency regime with global standards. Such reform would enhance economic stability, facilitate smoother resolution of multinational insolvency cases, and reinforce