The Ministry of Corporate Affairs (MCA) has issued a fresh draft, proposing exclusion of critical financial service providers such as banks and insurance companies from the applicability of cross-border insolvency provisions.
Such exclusion is in line with the design of the Insolvency and Bankruptcy Code (IBC), where financial service providers are subject to a special insolvency process.
Further, MCA has proposed that all benches of National Company Law Tribunal (NCLT) and Debt Resolution Tribunal may have jurisdiction to adjudicate all such applications.
Accordingly, cross-border proceedings arising in respect of corporate debtors that have registrations in India will be dealt with at the NCLT bench having jurisdiction over the registered office of the corporate debtor, however, cross-border applications regarding any person incorporated with limited liability outside India may be dealt with by the Principal Bench of NCLT.
The introduction of a cross-border insolvency law in the IBC, that is in line with international best practices and suitable for the Indian context, may be beneficial to all stakeholders,” MCA added.
MCA has sought public comments on draft cross-border insolvency framework under IBC by 15th December, 2021.