The Insolvency Law Committee (“ILC”), which is a high-level Government-backed committee of insolvency experts, has recommended that India adopt the Model Law on Cross-Border Insolvency, 1997 (“Model Law”), promulgated by the United Nations Commission on International Trade Law (“UNCITRAL”).
However, the ILC, while making this welcome recommendation, has also recommended that India temporarily enact the tenet of legislative reciprocity in its version of the Model Law. This article attempts to elucidate why it would be an imprudent idea to enact the tenet of legislative reciprocity in the Indian version of the Model Law, even temporarily.
Structurally, this article (after the preliminaries), first provides miniature knowledge capsules on the basics of cross-border insolvency and the other allied concepts surrounding the principle of legislative reciprocity (the primary assumption being that several readers of this article may not be well-versed with the basics of cross-border insolvency, as it is a fairly tight-knit and an upcoming field). Thereafter, this article highlights as to how the ILC has envisaged the application of the tenet of legislative reciprocity in the draft Indian version of the Model Law. Post-that, we reach the most critical part of this article wherein detailed reasoning is provided as to why enacting the tenet of legislative reciprocity in the Indian version of the Model Law is an imprudent idea. This article then concludes with the reiteration that enacting the tenet of legislative reciprocity in the Indian version of the Model Law is an imprudent idea.
