IBC (Amendment) Bill, 2025: An Attempt to Plug the Gap in Cross-Border Insolvency

The Insolvency and Bankruptcy Code, 2016 (IBC), reveals a significant lacuna in its legal framework concerning cross-border insolvency.

- AKHILESH DUBEY

Legal challenges under the IBC frequently arise in matters where a company’s assets and creditors are situated outside India. Although Sections 234 and 235 of the Code purport to address the issue of cross-border insolvency, they remain largely theoretical, as they rely heavily upon the Indian Government entering into formal reciprocal arrangements with other jurisdictions. Regrettably, no such agreements have been executed, despite almost a decade having passed since the Code came into force.

This procedural gap has become strikingly evident in recent high-profile airline insolvencies, during which the courts struggled to coordinate with foreign trustees and administer overseas assets. The resulting conundrum underscored the urgent need for an effective and globally integrated insolvency regime.