The Ministry of Corporate Affairs has released a draft on cross-border insolvency in order to strengthen Insolvency and Bankruptcy Code (IBC).
The existing IBC provisions (234&235) are not adequate to effectively deal with default cases of the domestic corporate debtor having assets and operations outside India.
The draft on cross-border insolvency favors adoption of UNCITRAL (United Nations Commission on International Trade Laws) Model Law on Cross-Border Insolvency, 1997.
Under it, central government after entering into an agreement with other countries may bring overseas asset of domestic corporate debtor into consideration of insolvency resolution in India.