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Globalisation has established a high degree of interdependence between nations and their respective companies. Cross-border insolvency is a matter of immense legal importance for companies engaged in international transactions. This article explores the complexities, procedures, and authorities that are involved in the process of cross-border insolvency, and the provisions of the Insolvency and Bankruptcy Code, 2016, and the Civil Procedure Code are closely examined. Moreover, this article studies in detail, India’s first cross-border insolvency case involving Jet Airways and the State Bank of India which became an important case law of global importance due to the involvement of Dutch authorities. Eventually, by the order of the NCLAT, the two parties complied with a cross-border bankruptcy protocol, concluding a complex “insolvency plan.” The procedures and laws addressing cross-border insolvency and the legal questions arising thereof are found to be inadequate and ineffective.

Keywords – Cross border insolvency, Dutch authorities, Insolvency and Bankruptcy Code, 2016.

Cross Border insolvency is dealt with under the Insolvency and Bankruptcy code, 2016 in India. There are two provisions in the act assisting cross-border insolvency disputes under Section 234[1] and Section 235[2] of the Code. The Central Government enters into a bilateral agreement with the government of other countries to resolve and enforce the provisions relating to the Code pertaining to cross-border insolvency. The Central Government directs the application of the provisions of this Code with respect to the property or property of the corporate debtor or of the debtor, including the personal surety of the corporate debtor. Locations in countries other than India with which reciprocal agreements have been concluded shall be subject to conditions as per the government.

The Adjudicating authority upon receipt of the application, and if evidence or action is deemed necessary with respect to the property an application may be filed with the courts or authorities of that country in connection with bankruptcy, liquidation, or insolvency proceedings. A letter of request can be issued to a court in a nation where an agreement has been entered.

The Civil Procedure Code and the principles of English common law in India shall apply to the recognition of foreign legal proceedings. For Indian proceedings to be recognized abroad, the procedural rules of that foreign jurisdiction shall apply. Finalizing bilateral agreements is a lengthy process as it involves lengthy negotiations and thus takes a long time. In addition, each trade is different and therefore it will be difficult for the contracting authorities to enforce agreements/treaties with other countries.

The landmark case of State Bank of India vs. Jet Airways (India) Ltd[3]

Over a period of 2 years in 3 different courts, the case begins with the commencement of corporate insolvency proceedings against Jet Airways and ends with NCLT’s final approval of a resolution plan for its turnaround.

Three petitions were filed against Jet Airways, the corporate debtor, in this case, to initiate Corporate Insolvency Proceedings (CIRP) due to a large amount of outstanding debt. At the first hearing, the NCLT bench was informed that bankruptcy proceedings against Jet Airways had been opened in a Dutch district court a month before them. In this regard, the Council decided that simultaneous proceedings on the same issue would lead to delays and distort the proceedings in this case. The rationale put forward is that the two sections, Sections 234 and 235 of the Code on Recognition of Orders of Foreign Jurisdictions, set out the requirements for the Government of India to enter into reciprocal agreements with foreign countries. However, the Court found that no mutual agreement had been reached with the Dutch authorities in this case.

In addition, the Bench also believed that NCLT had the necessary jurisdiction over the matter at hand, as Jet Airways had its registered office and major assets in India. By the decision of June 20, 2019, the Bench annulled the District Court of Netherlands proceedings and declared them null and void. The commencement of corporate insolvency proceedings in India against Jet Airways was accepted by NCLT.

Jet Airways was subject to parallel insolvency proceedings in India and Netherlands.[4] Decisions made by the NCLT Benchmark regarding non-approved aspects of the Dutch process were challenged by the Dutch Trustees before the NCLAT. NCLAT reviewed the appeal and asked the ‘Resolution Professional’ appointed on behalf of Jet Airways to work with the Dutch Trustee to explore the feasibility of a joint ‘Corporate Insolvency Resolution Process, as instructed, the RP reached an agreement with the Dutch trustee to expedite the settlement process through a “proposed model of co-operation“. The parties reached a final agreement on the proposed model, which was submitted to NCLAT for approval. NCLAT then accepted the model on order dated September 26th.  Bank also allowed Dutch court officials to attend Jet Airways meetings. In the protocol, it was stated that “The Parties recognize that the Company being an Indian company with its Centre of main interest in India, the Indian Proceedings are the main insolvency proceedings, and the Dutch Proceedings are the non-main insolvency proceedings”, due to which Indian laws are applicable to the foreign assets located in the Netherlands.

Dutch authorities were permitted by NCLAT to participate in the creditors’ committee, but they did not have voting rights. The Resolution Professionals and the creditor’s committee were instructed to cooperate with the Dutch trustees and to enter into such cooperation agreements to conduct the insolvency proceedings jointly. By order of the NCLAT, both sides had joined the “cross-border insolvency protocol.” According to this protocol, both sides, the Insolvency Professional and Dutch Trustees could consolidate the claim under their jurisdiction and review other processes based on the information obtained.

A motion for final approval of the resolution plan was submitted to the NCLT Mumbai Bench. By order of June 22, 2021, Bench accepted most of the “windup plan” and gave the consortium 90 days to obtain the necessary regulatory approvals and approval from the Directorate General of Civil Aviation (DGCA) had ordered the establishment of a Monitoring board to oversee the entire process. This concluded India’s first cross-border insolvency under the Insolvency and Bankruptcy Code, 2016.


The Insolvency Law Committee made a report on October 2018 recommending the Model Law be incorporated into the Code. The UNCITRAL Model Law has some changes and deviations that the Committee felt were important for the Indian context and are included in the Draft Provisions.

Report by Insolvency Law Committee

The Draft Provisions would only be applicable to corporate debtors. The Code’s proceedings may be started solely in the event that the corporate debtor has assets in India. Foreign creditors can also take part in the insolvency resolution process as stated in the case of Macquarie Bank Limited v Shilpi Cable Technologies Ltd[5].

Foreign main proceedings are brought in the country where the corporate debtor has its main center of interest. The center of interest is determined by the jurisdiction of the registered office. This presumption would not be made if the corporate debtor’s registered office has not changed countries three months before the filing of an application for the initiation of insolvency proceedings. The NCLT will conduct an evaluation to ascertain the location of the corporate debtor’s central administration and if such location is easily accessible to third parties, like the creditor if still not determined then the Central Government shall prescribe the procedure for the purpose of finding the center of interest. Hence, in our case, the proceedings were conducted in India, and the Dutch Creditors were allowed to attend the proceedings.

When the assets of the corporate debtor are situated in more than one legal jurisdiction then establishing a moratorium is of vital importance for cross-border insolvency. If the NCLT concludes that the proceedings are foreign main proceedings, then mandatory relief shall be granted by declaring a moratorium. If an application has been filed for recognition of foreign proceedings and the proceedings have already commenced under the IBC Code i.e., simultaneous proceedings, any non-mandatory relief that the NCLT grants with respect to that foreign proceedings must be in line with the Code’s procedure. If a foreign proceeding is identified as the main proceeding, the automatic mandatory relief prescribed under the Draft Provisions will not apply. Further, any mandatory or non-mandatory relief granted by the NCLT w.r.t the foreign proceedings shall get terminated or modified if inconsistent with the IBC, only if the proceedings under the Code are commenced after the recognition of a foreign proceeding.

The Central Government may issue certain guidelines to be followed by the NCLT and foreign courts for cooperation and communication. As the proceedings were recognized as foreign main proceedings and Jet Airways had its assets in India, the proceedings commenced under the Code.


The cross-border insolvency procedure is deeply flawed as there are no proper provisions governing the Code. The Insolvency Law Committee has recommended a draft, but for that to be implemented a Bill must be formulated. Though, an amendment under the Code shall facilitate a favorable business environment for the creditors thus improving the ease of doing business.

The Jet Airways dispute underlined the requirement of a robust cross-border insolvency mechanism in India, and “an imminent need was felt to fill the legislative gap”.[6] Given the challenges being faced by regulators, courts, and tribunals in this regard, the Jet Airways case which had assets and claims from outside India highlighted the need for enacting a law, harmonious with the international best practices.

[1] Insolvency and Bankruptcy Code,2016, No 234, Acts of Parliament, 2016, (India)

[2] Insolvency and Bankruptcy Code,2016, No 235, Acts of Parliament, 2016, (India)

[3] Jet Airways (India) Ltd. v. State Bank of India, 2019 SCC Online NCLAT 1216

[4] Jet Airways (India) Ltd. (Offshore Regional Hub) v. SBI, 2019 SCC OnLine NCLAT 1216.

[5] Macquarie Bank Limited v Shilpi Cable Technologies Ltd. (2018) 2 SCC 674

[6] Neeti Shikha, Cross‐border insolvency in India: What lies ahead, 30 INT INSOLVENCY REV. 163, 163–168, (2021).

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