The Insolvency and Bankruptcy Board of India (IBBI) has come up with a proposal for introduction of system of “Single Transferable Vote” (hereinafter, “STV”), also referred to as “preferential voting”, for arriving at speedier resolution process by the Committee of Creditors (“COC”) under the Insolvency and Bankruptcy Code, 2016 (hereinafter, “Code)”. IBBI has published a paper titled “Discussion Paper on measures for increasing the possibility of resolution, value of resolution plan and enabling timely resolution” on 7th June 2023 soliciting public comments on this subject matter. The said proposal is being viewed as an innovation solution to fast track the insolvency resolution process which has been bogged down with delays due to lack of acceptance of insolvency plans by the CoC. Recent analysis shows that large haircuts that are being take by the creditors in arriving at a resolution in CIRP are directly attributable to such procedural delays. This paper attempts to analyze the concept of “STV” and its potential implication in the commercial arena.
