Abstract

Cross-border insolvency has emerged as a critical challenge in the era of globalization, where corporations operate across multiple jurisdictions and hold assets worldwide. This paper examines the phenomenon of forum shopping in cross-border insolvency proceedings, wherein debtors or creditors strategically select favorable jurisdictions to gain legal advantage. Such practices undermine fairness, legal certainty, and the equitable treatment of stakeholders. The study adopts a doctrinal methodology, analysing the legal framework governing insolvency in India, particularly under the Insolvency and Bankruptcy Code, 2016, in comparison with international standards such as the UNCITRAL Model Law on Cross-Border Insolvency and the U.S. Bankruptcy Code. It explores competing theoretical approaches—universalism and territorialism—and evaluates the evolving concept of modified universalism as a balanced solution to address jurisdictional conflicts and forum shopping. The paper identifies significant lacunae in the Indian framework, including the absence of a comprehensive cross-border insolvency regime and limited statutory provisions under Sections 234 and 235 of the IBC. While Indian courts have relied on principles such as comity and reciprocity, the lack of formal adoption of the UNCITRAL Model Law creates uncertainty and scope for strategic forum selection. Through comparative and analytical evaluation, the study argues for the incorporation of key provisions of the UNCITRAL Model Law into Indian law to ensure greater cooperation, predictability, and protection of creditor and debtor interests. It concludes that adopting a modified universalist approach would help curb abusive forum shopping while preserving sovereign interests, thereby aligning India with global insolvency practices.

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