For several years, India has had various overlapping laws and adjudicating authorities for dealing with financial distress and insolvency, which has often resulted in multiple proceedings being initiated before different forums in situations of distress. This in turn has resulted in ineffective and delayed recovery or restructuring and placed excessive strain on lenders.

Background

Overview

The following propositions for cross-border security and insolvency law in Scotland have recently been supported at first instance in the Court of Session:

1. a floating charge need not be valid and enforceable under the law governing foreign assets charged in order to be considered valid and enforceable over such assets for the purposes of appointing an administrator out of court under the Insolvency Act 1986 (the IA);

Preamble

The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code’) received the assent of the President of India on May 28, 2016.

Background

The Board constituted under the chairmanship of Mr MS Sahoo has recently rejected an application for registration as an insolvency professional (IP) under regulation 7 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (IP Regulations) through its first regulatory order.

Factual Matrix

In a recent order admitting a petition for insolvency resolution filed by Essar Projects India Limited (Operational Creditor) against MCL Global Steel Private Limited (Corporate Debtor), the National Company Law Tribunal (Mumbai Bench) (NCLT) has clarified what constitutes a ‘disputed debt’ within the meaning of Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016 (Code) and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Facts of the case

1 NEWSFLASH 4 April 2017 Introduction By way of background, the Insolvency and Bankruptcy Code, 2016 (Code) was enacted with the primary objective to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporates, firms and individuals in a time bound manner to maximise the value of their assets. The genesis of the Code is rooted in the long-term vision of providing an effective legal framework for timely resolution of insolvency and bankruptcy, which would support development of credit markets and encourage entrepreneurship.

The Insolvency and Bankruptcy Board of India (‘IBBI’) was established under Insolvency and Bankruptcy Code, 2016 (‘Code’). On 31st March 2017, IBBI in exercise of its powers under the said Code notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation) Regulations, 2017 (‘Regulation’). It came into force with effect from 1st April 2017. The Regulation provides for a complete framework for the voluntary liquidation of any corporate person.

Background