Cross-border insolvency: Cabinet likely to take up new provisions soon

The ministry of corporate affairs is learnt to have prepared a Cabinet note on cross-border insolvency that talks of bringing in a separate chapter in the Insolvency and Bankruptcy Code (IBC) against the current provisions under Sections 234 and 235 of the Code. Rules under the current provisions have not been notified and, hence, cross-border insolvency has not yet become effective.

The note is expected to be taken to the Cabinet soon. The proposed cross-border provision will empower foreign creditors to claim assets on insolvent Indian companies and vice versa.

The chapter is being added to the Code because under the present