Insolvency Reforms in India: History, Growth and Cross Border Issues

This paper examines the impact of the new insolvency code that is Insolvency and Bankruptcy code of India, 2016. With fast changing economy and ways of doing business there was a need for a new law as previously governing act failed to solve the insolvency issues effectively. In this paper the issues and loopholes in SICA etc are properly discussed and how IBC has made the insolvency proceedings simpler and time effective as compared to the previous Acts where there was no time limit. Appointment of an Resolution Professional (RP) by the National Company Law Tribunal on recommendation from the Insolvency and Bankruptcy Board has made this process transparent as RP takes over the management of the company and committee of creditors are formed whose votes are taken in all important matter. This code has no doubt improved the insolvency process in India but issues with cross border insolvency still exist. According to IBC for cross border issue bilateral arrangements need to be made with the respective country where lies the assets of the corporate debtor but till now India has not formed such bilateral arrangement with any country. Many progressive countries have adopted the UNCITRAL model that has lead to uniformity in the cross border insolvency laws and has increased the ease of doing business there. This paper properly describes the issues faced by the companies in case of cross border insolvency, as India has yet not adopted the UNCITRAL model.