On September 18, 2023, the Insolvency and Bankruptcy Board of India (“IBBI”) notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (“CIRP Amendment Regulations”) amending the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) under the Insolvency & Bankruptcy Code, 2016 (“IBC”).

In a nutshell, the CIRP Amendment Regulations:

I. INTRODUCTION

The issue of release/enforcement of third party guarantees as part of a resolution plan of the borrower has been the subject of litigation across various judicial forums in India.

To clarify this issue, the Insolvency and Bankruptcy Board of India (IBBI) has proposed amendments to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 as part of its recent discussion paper.

Since the inception of the Insolvency and Bankruptcy Code, 2016 in December 2016, India has witnessed not only a paradigm shift from the conventional ‘debtor in possession’ to a progressive ‘creditor in control’ but has also produced desirable results under the new statutory debt resolution regime.

On June 19, 2024, the Insolvency and Bankruptcy Board of India (IBBI) released a discussion paper proposing to bring in significant amendments to the IBBI (Insolvency Resolution Process for Corporate Process) Regulations, 2016 (CIRP Regulations), aiming to streamline the process, enhance its effectiveness and reduce delays.[1] It complements the plan, unveiled earlier this month, to reduce the compliance burden on insolvency professionals.

BACKGROUND

Since its inception the Insolvency and Bankruptcy Code, 2016 (Code) has been an evolving legislation with regular updation(s) being brought about in the form of rules and regulations with a view of streamlining the corporate insolvency resolution process (CIRP).

Since the inception of the Insolvency and Bankruptcy Code, 2016 (“Code“), the debt resolution regime in India has witnessed not only a paradigm shift from the conventional ‘debtor in possession’ to a progressive ‘creditor in control’ but has also undergone a significant transformation, marking a departure from its traditional labyrinthine processes to a more streamlined and effective framework.

The role of a liquidator comes with its own set of challenges and the computation of their fee is no exception. This article delves into a legal battle between a liquidator and the Insolvency and Bankruptcy Board (“IBBI”) concerning the Board’s clarifications[1] on fee calculation. The crux of the dispute?

On 18 September 2023, the Insolvency and Bankruptcy Board of India (IBBI) introduced the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (CIRP Amendment Regulations). Here is a summary of the key changes made through these regulations:

Introduction

The Insolvency and Bankruptcy Board of India (IBBI) on 18 September 2023 notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (CIRP Amendment Regulations) amending the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations).

The key changes brought about by the CIRP Amendment Regulations are as follows: