- Cross-border insolvency laws are essential for international trade, providing legal certainty and improving the health of trading entities with cross-border operations.
- The UN Commission on International Trade Law (UNCITRAL) developed a Model Law on cross-border insolvency, but India’s progress in adopting it has been slow.
- UNCITRAL’s Model Law, based on access, recognition, cooperation, and coordination, aims to harmonize laws across nations.
- India’s Current provisions allow only bilateral agreements on a case-by-case basis, seen as inadequate.
- Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPA) cover areas like trade, intellectual property, and investments but lack detailed cross-border insolvency provisions.
- FTAs should include cross-border insolvency dimensions to strengthen trade agreements.
- Collaboration between the Commerce Ministry, Insolvency and Bankruptcy Board, and legal experts is needed to assess the practical integration of insolvency laws into FTAs.
| United Nations Commission on International Trade Law (UNCITRAL) It is a global legal body established in 1966 by the UN General Assembly. It aims to harmonize and modernize international trade laws, facilitating smoother global commerce. UNCITRAL develops model laws, legal guides, and conventions covering various areas such as arbitration, electronic commerce, and cross-border insolvency. The organization’s key achievements include the UNCITRAL Model Law on International Commercial Arbitration and the United Nations Convention on Contracts for the International Sale of Goods (CISG). UNCITRAL plays a vital role in promoting legal consistency and cooperation in international trade. |
Dig Deeper: Read about the Bilateral Investment Treaties and UNCTAD.
