The Insolvency and Bankruptcy Code, 2016

Introduction

Following the establishment of the Insolvency and Bankruptcy Board of India, the government has taken two concrete steps to expedite the implementation of the Insolvency and Bankruptcy Code 2016 – in particular, the government has:

• appointed members to the Insolvency and Bankruptcy Board; and
• released draft rules and regulations.

Appointments

The Scottish Court of Session considers the interaction of Indian insolvency proceedings for three Scottish Companies that had also been placed into Administration in Scotland.

Background

The Victoria Jute Company Limited ("Victoria"), The Samnuggur Jute Factory Limited ("Samnuggur") and Titaghur plc ("Titaghur") were all incorporated in Scotland, but had been carrying out their business in India.

Background

With a new Insolvency and Bankruptcy Code that has become effective on 1 December 2016, India seeks to expedite the process for creditors seeking payment or foreclosure through the courts.

The upper house of Parliament (the Rajya Sabha) passed the Insolvency and Bankruptcy Code 2016 on May 11 2016.

The Insolvency and Bankruptcy Code passed by the Parliament is a welcome overhaul of the existing framework dealing with insolvency of corporates, individuals, partnerships and other entities. It paves the way for much needed reforms while focussing on creditor driven insolvency resolution.

BACKGROUND

Introduction

The Insolvency and Bankruptcy Code, 2016 (Code) has just been passed by both Houses of the Indian Parliament. The key objectives of the Indian government in driving this legislation forward were to improve India‘s poor ranking on the ease of doing business index created by the World Bank Group and to stimulate the growth of the Indian capital markets, and the stated intention of the Code is to replace the relevant insolvency, restructuring and winding up provisions which are spread over a number of Indian statutes.

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