Cross-border insolvency refers to the legal framework governing insolvency proceedings that involve assets, creditors, or related proceedings in more than one country. Under Indian law, Sections 234 and 235 of the Insolvency and Bankruptcy Code, 2016 provide for cross-border cooperation through bilateral agreements and letters of request, but these provisions have not been notified and remain inoperative, leaving India without a comprehensive cross-border insolvency regime.
Legal definition
The IBC addresses cross-border insolvency in two provisions:
Section 234 provides:
(1) The Central Government may enter into an agreement with the Government of any country outside India for enforcing the provisions of this Code.
(2) The Central Government may, by notification in the Official Gazette, direct that the application of provisions of this Code in relation to assets or property of corporate debtor or debtor, including a personal guarantor of a corporate debtor, as the case may be, situated at any place in a country outside India with which reciprocal arrangements have been made, shall be subject to such conditions as may be specified.
Section 235 provides:
(1) Notwithstanding anything contained in this Code or any law for the time being in force, the Central Government may issue a letter of request to a court or an authority of a country outside India for any assistance or evidence in relation to any matter relating to the insolvency resolution process.
(2) Upon receipt of a letter of request from a court or authority of a country outside India, the Adjudicating Authority may, on being satisfied that the request relates to an insolvency resolution process, provide such assistance as the Adjudicating Authority may deem fit.
Neither Section 234 nor Section 235 has been notified by the Central Government. India has not entered into any bilateral agreements for cross-border insolvency cooperation.
How courts have interpreted this term
Jet Airways (India) Ltd. — Cross-Border Protocol (NCLT Mumbai, 2019)
The Jet Airways insolvency was India's first major test case for cross-border insolvency. The airline was simultaneously subject to insolvency proceedings in India (before the NCLT Mumbai) and in the Netherlands (before the Noord-Holland District Court). In the absence of a statutory framework, the NCLT and the Dutch court approved a unique cross-border insolvency protocol that established principles for cooperation, information sharing, and avoidance of conflicting orders. This protocol was the first of its kind in Indian insolvency practice and demonstrated the practical need for a formal cross-border framework.
SBI v. Jet Airways (India) Ltd. (NCLAT, 2019)
The NCLAT affirmed the NCLT's approach in approving the cross-border protocol with the Dutch court. The NCLAT held that in the absence of notified statutory provisions, the NCLT has inherent powers under the IBC to facilitate cooperation with foreign courts to preserve the assets of the corporate debtor and ensure an orderly resolution process.
Videocon Industries Ltd. (NCLT Mumbai, 2020)
In the Videocon insolvency, the NCLT dealt with the issue of foreign assets of an Indian corporate debtor. The Tribunal observed that the absence of a cross-border insolvency framework creates significant challenges in identifying, protecting, and realising assets located outside India, particularly where local courts in the foreign jurisdiction may not recognise Indian insolvency proceedings.
Why this matters
India's lack of a comprehensive cross-border insolvency framework is one of the most significant gaps in the IBC. As Indian companies increasingly operate globally — with assets, subsidiaries, and creditors spread across multiple jurisdictions — the need for a structured mechanism for cooperation between Indian and foreign courts has become urgent.
The Insolvency Law Committee (ILC) submitted a report in October 2018 recommending the adoption of the UNCITRAL Model Law on Cross-Border Insolvency, 1997, with suitable modifications for the Indian context. The committee proposed a "Draft Part Z" comprising 29 sections to be inserted into the IBC, covering: (i) access by foreign representatives to Indian courts; (ii) recognition of foreign proceedings; (iii) relief available upon recognition; (iv) cooperation and coordination between courts; and (v) public policy exceptions. Despite these recommendations, the draft provisions have not yet been enacted.
For practitioners dealing with Indian companies that have foreign assets or foreign creditors, the current position requires reliance on ad hoc protocols (as in Jet Airways), letters rogatory under the Code of Civil Procedure, or bilateral treaties on mutual legal assistance. These mechanisms are cumbersome, time-consuming, and lack the certainty that a statutory framework would provide. The Jet Airways protocol remains the high-water mark of Indian cross-border insolvency cooperation.
Related terms
Broader framework:
Adjudicating authority:
Related processes:
Frequently asked questions
Are Sections 234 and 235 of the IBC operational?
No. As of 2026, neither Section 234 nor Section 235 has been notified by the Central Government. India has not entered into any bilateral agreement for cross-border insolvency cooperation under Section 234, and the letter of request mechanism under Section 235 is not yet operational.
Has India adopted the UNCITRAL Model Law on Cross-Border Insolvency?
Not yet. The Insolvency Law Committee recommended adoption in October 2018, proposing a "Draft Part Z" for insertion into the IBC. The UNCITRAL Model Law has been adopted by 44 countries. India's adoption remains pending, leaving a significant gap in the insolvency framework.
How was the Jet Airways cross-border insolvency handled?
In the absence of a statutory framework, the NCLT Mumbai and the Noord-Holland District Court in the Netherlands approved an ad hoc cross-border insolvency protocol. This protocol established principles for cooperation, information sharing, and coordination between the two proceedings, representing India's first practical exercise in cross-border insolvency cooperation.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.