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158 Economic Survey 2021-22

4.70 Therefore, there is a need for a standardized framework for Cross-Border insolvency. This
issue is not new and in fact, the proposal to frame a robust cross border insolvency framework
has already been highlighted in the report of the Insolvency Law Committee (ILC) (October
10
2018). The Committee had recommended the adoption of the United Nations Commission on
International Trade Law (UNCITRAL) with certain modifications to make it suitable to the
Indian context. In fact, UNCITRAL on Cross-Border Insolvency, 1997 has emerged as the most
widely accepted legal framework to deal with cross-border insolvency issues. It provides a
legislative framework that can be adopted by countries with modifications to suit the domestic
context of the enacting jurisdiction. It has been adopted by 49 countries until now, such as
Singapore, UK, US, South Africa, Korea, etc. This law addresses the core issues of cross border
insolvency cases with the help of four main principles:
• Access: It allows foreign professionals and creditors direct access to domestic courts and
enables them to participate in and commence domestic insolvency proceedings against a
debtor.

• Recognition: It allows recognition of foreign proceedings and enables courts to determine
relief accordingly.

• Cooperation: It provides a framework for cooperation between insolvency professionals and
courts of countries.
• Coordination: It allows for coordination in the conduct of concurrent proceedings in different
jurisdictions.

10 Government had invited suggestions/comments on the ILC report (Draft Z) from stakeholders.