Panel likely to suggest UN model for cases on cross-border insolvency
New Delhi: A high-level panel is likely to recommend a United Nations model for cross-border insolvency cases under the Insolvency and Bankruptcy Code, according to a senior official.
The Insolvency Law Committee (ILC) is looking into the discussion paper related to having the UN model for cross-border insolvency matters as well as the comments received on the paper.
Under the Code, there are provisions to deal with cross-border insolvency matters.
The panel, headed by Corporate Affairs Secretary Injeti Srinivas, is likely to recommend adoption of the United Nations Commission on International Trade Law (UNCITRAL) model to deal with such matter. The report is expected to be submitted soon, the official said.
The model would be on the basis of Centre of Main Interests (COMI), which would be defined. In accordance with COMI, the place of main proceedings for cross-border cases would be decided.
Further, the official said it would be essentially a co-operation agreement and the proceedings would be at one place.
Established in 1966, UNCITRAL is a subsidiary body of the General Assembly of the UN with the general mandate to further the progressive harmonisation and unification of the law of international trade, as per its website.
As per UNCITRAL, 'harmonisation' and 'unification' of the law of international trade refers to the process through which the law facilitating international commerce is created and adopted.
"Harmonisation may conceptually be thought of as the process through which domestic laws may be modified to enhance predictability in cross-border commercial transactions.
"Unification may be seen as the adoption by States of a common legal standard governing particular aspects of international business transactions," the website said.
In June, the Corporate Affairs Ministry, while coming out with the draft norms, said it was keen to introduce a globally accepted and well-recognised cross-border insolvency framework, fine-tuned to suit the needs of the aspirational Indian economy.