Cross-Border Insolvency under the 2016 Insolvency and Bankruptcy Code: Necessity and Roadmap for Comprehensive Reform.

Abstract

Cross-border insolvency remains one of the most significant yet unresolved challenges within India’s insolvency framework. Despite increasing globalization and India’s expanding integration into the global economy, the country still lacks a comprehensive statutory framework to deal with insolvency cases involving debtors, creditors, and assets across multiple jurisdictions. Currently, India depends mainly on ad hoc measures — most notably the cross-border insolvency protocol approved by the National Company Law Appellate Tribunal (NCLAT) in the 2019 Jet Airways case. While such protocols provide temporary, case-specific relief, they are often time-consuming, costly, and fail to ensure predictability or uniformity. To address the lacunae in the 2016 Insolvency and Bankruptcy Code (IBC), and to regulate cross-border insolvency in India, the Insolvency and Bankruptcy Code (Amendment) Bill (2025) has been introduced in the Lok Sabha (the lower house of Parliament). However, instead of laying down substantive regulatory provisions, the proposed amendment merely delegates the power to the Central Government to frame rules at a later stage, thus leaving this critical gap unresolved. The study addresses these shortcomings by tracing the evolution of cross-border insolvency frameworks and critically examining India’s legislative and judicial approaches both before and after the enactment of the IBC. Through this analysis, the paper identifies the major challenges that hinder India’s adoption of an effective framework, including the limitations of “soft law,” inconsistent international practices, the lack of regional cooperation, and sovereignty concerns. The findings of this article recommend that India adopt a uniform, predictable, and enforceable framework for cross-border insolvency, drawing on the principles of the UNCITRAL Model Law on Cross-Border Insolvency (1997) with necessary modifications to address public-policy concerns. The establishment of such a framework would help mitigate transaction costs, reduce the burden on the judiciary, and at the same time foster greater certainty, procedural efficiency, and confidence among stakeholders. In conclusion, the paper maintains that establishing a stable cross-border insolvency regime is essential for strengthening India’s insolvency framework and positioning the country as a credible player in the global financial system.