Predictability in Corporate Insolvency Law: A Cornerstone Undermined in Bhushan Power Steel Limited Case

Predictability is an important factor in ensuring legal clarity and investor confidence in corporation law. Corporate entities may clearly assess risks, allocate resources, and make strategic decisions under a stable and predictable legal framework. Recent developments in Indian corporate jurisprudence, however, have generated concerns about the growing ambiguity in how commercial principles are interpreted and implemented, particularly in connection to the Insolvency and Bankruptcy Code, 2016 (IBC). This concern has been heightened by the Supreme Court's recent decision in Bhushan Power and Steel Ltd. Case (BPSL), which appears to undermine the principle of legal certainty and predictability in corporate law that the corporate regime in general and under the IBC seeks to protect. This case, demonstrates the challenges in resolving insolvencies, as well as the judiciary's crucial role in maintaining corporate governance and predictability. This paper examines the Apex Court’s verdict in BPSL case, prior decisions that have similarly threatened legal certainty and summarise the BPSL case in order to evaluate the judgment's deviation from recognized legal principles and international standards. It highlights the potential detrimental effects of India's judicial unpredictability on “investor confidence” and “ease of doing business”. It emphasize on the importance of judicial reasoning being in line with legislative intent in preserving institutional trust in corporate laws.