Cross explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
As Indian companies increasingly operate internationally and foreign companies conduct business in India, cross-border insolvency has become a critical legal challenge. The IBC 2016 has limited provisions, and India is moving towards adopting the UNCITRAL Model Law on Cross-Border Insolvency.
Current Framework: Sections 234-235 IBC
Section 234 — Bilateral Agreements
Enables the Central Government to enter bilateral treaties or agreements with other countries for:
- Enforcement of provisions of IBC in those countries
- Application of those countries insolvency laws to Indian proceedings
- Cooperation between insolvency authorities
Limitation: No bilateral agreements have been entered into as of 2025. This creates a complete vacuum for practical cross-border insolvency.
Section 235 — Letters of Request
Adjudicating Authority (NCLT) can issue letters of request to competent courts in foreign countries requesting assistance in cross-border insolvency proceedings — applying IBC principles. Used in practice but recognition by foreign courts is uncertain without treaties.
The UNCITRAL Model Law Framework (Proposed)
The UNCITRAL Model Law on Cross-Border Insolvency (1997) has been adopted by 50+ countries including USA (Chapter 15), UK, Australia, South Korea, and Japan. Key provisions:
Access for Foreign Representatives
Foreign insolvency representatives (RP equivalents) can directly access domestic courts to participate in local proceedings of the same debtor.
Recognition of Foreign Proceedings
| Type | Definition | Effect on Recognition |
|---|---|---|
| Foreign Main Proceeding | Proceeding in country where debtor has COMI | Automatic stay/moratorium in recognizing country |
| Foreign Non-Main Proceeding | Proceeding in country where debtor has an establishment | Discretionary relief only |
Cooperation with Foreign Courts
Courts and insolvency practitioners of different countries can communicate and cooperate directly — sharing information, coordinating proceedings, cross-border protocols.
Jet Airways Cross-Border Case (2019-2020)
Jet Airways is India's landmark cross-border insolvency case:
- Jet Airways entered CIRP in June 2019 at NCLT Mumbai
- Dutch court had appointed provisional insolvency administrators for Jet Netherlands
- NCLT Mumbai issued letter of request to Dutch court
- Dutch and Indian courts conducted joint hearing (protocol) — India first cross-border judicial cooperation
- Lessons: absence of UNCITRAL Model Law caused delays and uncertainty in coordination
IBC Amendment Bill 2022 — Proposed Changes
The Amendment Bill proposed inserting Part ZA (Chapter IVA) with provisions based on UNCITRAL Model Law:
- COMI determination for debtors
- Mechanism for recognition of foreign proceedings
- Relief provisions (automatic stay or discretionary)
- Cooperation with foreign courts
- Concurrent proceedings (same debtor in multiple countries)
As of May 2025: Bill passed Lok Sabha but pending Rajya Sabha approval and enactment.
Practical Challenges Today
- No automatic moratorium in India against foreign creditors when CIRP is initiated
- Indian RP cannot access foreign assets of debtor without bilateral agreements
- Foreign creditors uncertain about their rights in Indian CIRP — they participate as "foreign operational/financial creditors" with same rights under existing IBC
- Asset stripping risk: promoters may move assets offshore before CIRP commences
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Get Free ConsultationKey Facts About Cross
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What are the current cross-border insolvency provisions in IBC?
Sections 234-235 of IBC allow the Central Government to enter bilateral agreements with other countries for cross-border insolvency cooperation. However, no agreements have been finalized yet, creating a practical gap.
What is the UNCITRAL Model Law on Cross-Border Insolvency?
A set of provisions developed by the UN Commission on International Trade Law (UNCITRAL) in 1997, providing for: recognition of foreign proceedings, cooperation with foreign courts, access for foreign representatives, and relief for foreign proceedings.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Cross: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly.