The most innovative features of the new Insolvency Code include, among others: (i) the introduction of safeguard obligations aimed at detecting corporate distress and promoting the adoption of restructuring tools at an early stage; (ii) a more favourable approach to procedures allowing for business continuation on a going concern basis, as opposed to those leading to liquidation of the company; and (iii) specific provisions concerning the insolvency / restructuring of company groups.

Introduction

Il D.L. 24 agosto 2021 n. 118 (Decreto Crisi d’Impresa) è ora legge: il 23 ottobre 2021 è stata pubblicata in Gazzetta Ufficiale la L. 147/2021 di conversione del D.L.

The conversion into statute on 23 October 2021 of the so-called Business Distress Bill adds new provisions to those recently adopted by the Italian government to address corporate distress following the COVID-19 pandemic, to provide companies with new legal tools to prevent the onset of economic distress or overcome reversible financial instability.

Introduction

Nearly a year ago, the Italian Parliament passed Law 155/2017 giving the Government twelve months to adopt a root and branch reform of the rules governing business distress and insolvency procedures, taking into account European legislation (EU Regulation 2015/848, Commission Recommendation 2014/135) and the principles of the United Nations Commission on International Trade Law.

The National Company Law Appellate Tribunal, New Delhi (NCLAT) on 7 November 2017 passed a judgment in the case of M/s Speculum Plast Private Limited v. PTC Techno Private Limited, putting to rest the question of the applicability of the Limitation Act, 1963 (Limitation Act) to the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC). The present judgment comes in the wake of the decision of the NCLAT in Neelkanth Township and Construction Pvt. Ltd.

In a recent decision of M/s Ksheeraabd Constructions Private Limited v M/s Vijay Nirman Company Private Limited, the National Company Law Appellate Tribunal (NCLAT) has held that proceedings pending under Section 34 of the Arbitration and Conciliation Act, 1996 (Act) does not constitute a ‘dispute’ under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code) and cannot come in the way of initiation of the insolvency resolution process, in terms of Section 9 of the Code.

Background

Significant innovations have been introduced in Italy by Law Decree no. 83 of 27 June 2015 (entitledUrgent Measures on Insolvency, Civil and Procedural Matters and the Organization and Functioning of Judicial Commissioners (the "Decree").The Decree was converted by the Italian Parliament into statutory law no.132 enacted 6 August 2015 (the "Conversion Law").