Cross border insolvency framework must respect global laws without overriding Indian jurisdiction, says former NCLAT Chief Mukhopadhaya

India must go in for a robust Cross-Border Insolvency framework that strikes a feasible balance between the domestic and foreign jurisdictions, former NCLAT Chairperson and former Supreme Court judge S J Mukhopadhaya has said.

“We will have to respect the law of other countries, but it does not mean superseding our law. The dominance should be of our law in our jurisdiction,”Mukhopadhaya said at an event on Cross Border Insolvency in the capital on Saturday.

His remarks are significant as India is in the process of finalising a framework for Cross Border Insolvency and is widely expected to get an IBC amendment Act passed in Parliament when the new government assumes office at the Centre post the general elections.

The event was organised by the Indian Institute of Insolvency Professionals of ICAI (IIIPI) jointly with the Foreign, Commonwealth & Development Office- United Kingdom (UKFCDO), the Insolvency and Bankruptcy Board of India (IBBI) and the Institute of Chartered Accounts of India (ICAI).

In addition to India, insolvency experts from the United Kingdom and Singapore shared their views in the conference which was attended by IPs from across the country.

Mukhopadhaya also emphasised the need to deliberate on how to deal with foreign partner companies which are holding or subsidiary or partner companies in a joint venture project in India.

Ashok Kumar Bhardwaj, Member (Judicial), NCLT, said “There is increasing emphasis on hybrid model of Cross-Border insolvency framework wherein different jurisdictions have their laws and also have space for common interest.”

Sudhaker Shukla, Whole Time Member-IBBI, said, “There exist wide variations on interpretation and implementation of UNCITRAL Model of law. The UNCITRAL law in Japan and South Korea are entirely different from those in the UK and the USA”. However, IBBI is trying to develop a framework on Cross-Border Insolvency with a cautious approach and also simultaneously working on Group Insolvency framework, he said. 

Ashok Haldia, Chairman-IIIPI said that IIIPI has been proactively engaged in capacity building and policy advocacy on various aspects of the insolvency profession at all levels including as to how the law should be interpreted and implemented.

“We are working closely with the NCLT and RERA to enhance the efficiency and efficacy of the insolvency process”, he said.

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