DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

TITLE: CONTRIBUATION OF PETER STONE TOWARDS THE DEVELOPMENT

OF CONFLICT OF LAWS IN MATRIMONY AND CROSS BORDER INSOLVENCY

SUBJECT: PRIVATE INTERNATIONAL LAW

NAME OF THE FACULTY: NANDINI CP MAAM

NAME OF THE STUDENT: SANSKAR JAIN

ROLL NO. 2018080

SEM 8
ACKNOWLEDGEMENT

I'd like to express my heartfelt gratitude to my teacher, who provided me with the wonderful
opportunity to do this wonderful project on the subject, as well as assisting me in conducting
extensive research and educating me on a variety of new topics for which I am grateful.

Second, I'd like to express my gratitude to my teammates, who assisted me greatly in

completing this project within the time constraints.
 TABLE OF CONTENT

1. ABSTRACT
2. INTRODUCTION
3. CHAPTER 1: CONFLICT OF LAWS IN MATRIMONY IN INDIAN CONTEXT
4. CHAPTER 2: LEGAL FRAMEWORK GOVERNING CROSS-BORDER
INSOLVENCY IN INDIA
5. CONCLUSION
 ABSTRACT

The book titled EU Private International Law by Peter Stone is based on the laws of private
international law or the conflicts of laws. It deals with different kinds of problems called such
as the relations which are governed by the private law between different countries and hence
they are also called as the conflicting laws. Such aproblems acan abe arelated ato aan aindividual’s
a personality, adomicile, afamily amatters, anationality, aresidence, aand aplace aof aincorporation.
a Every acountry ahas aits aown aset aof arules awhich ain atheir aprofound adeveloped alegal asystem aand
a such arules aform athe apart aof atheir aprivate ainternational alaw aand athey aare adifferent ain aall athe
a countries. aThe aharmonization aof athe aprivate ainternational acan abe afurther aachieved aby athe
a harmonization aof alaws aat athe aEU alevels aby athe ameasures awhich aare aadopted aby athe alegal
a framework aof athe aEuropean acommunity aand athe aentire afocus aof athis abook ais abased aon athis
a conception.
 INTRODUCTION

Part aIV aof athe abook awritten aby aPeter aStone aextensively adiscusses aabout afamily amatters aand ais
a divided ainto a3 achapters asuch aas amatrimonial aproceedings, aparental aresponsibility aand afamily
a maintenance, aand amatrimonial aproperty. aThe aauthor ain athe achapter aon amatrimonial
a proceedings atalks aabout acommunity aregulation aand ahow athe amatrimonial aproceedings aare
a governed aby athe aEC aregulation, a and a the a scope a of a it a is a limited a to a the a rules a of
a direct a jurisdiction a laid a down a in B
a russels aI aregulation aand athe aenforcement aof athe

a judgments adepends aon athe arules aof aBrussels aIaregulation aand anot aon athe achoice aof alaw. aFurther
a in athe acase aof adirect ajurisdiction, aarticles a1-3 aand a16-20 aof aBrussels aII aregulation adeal awith
a direct ajurisdiction ato aentertain athe apetitions aof adivorce, aseparation, aand aannulment. aThis apart
a also adiscusses aabout ahabitual aresidence aand astates athat aBrussels aII aregulation ahas anot adefined
a habitual aresidence aand astates athat ait ais ausually adefined aby athe acommunity alaw aof adifferent
a countries. aIn athe achapter aon aparental aresponsibility, athe aauthor atalks aabout aof aBrussels aII
a regulation ais aconfined ato athe aproceedings aand aorders afor athe a children a of a both a the a spouses
a when a the a matrimonial a proceedings a are a sustaining a between athe aparents. aIt ahas aalso abeen
a stated athat athe aBrussels aII aregulation ahas afurther aabolished athe adeclaration aof aenforceability
a with arespect ato aorders aof aaccess aand ainstead ait arespects athe asupplements aof athe aHague
a Convention aon achild aprotection aof a1980. aThe ascope aof athe aBrussels aII aregulation awhen ait
a comes ato aparental aresponsibility ais alimited ato aall atypes aof aapplications awhich aare acovered
a under asection a8 aof athe aChildren’s aAct, a1989. aIn athis achapter, athe aauthor aalso adiscusses aabout
a abduction aand astates athat aall athe aEC amember astates aand aalmost aall a the acountries aare
a members aof athe aHague aConvention aon acivil aaspects aof aInternational aChild aAbduction. aThe
a matter aof aabduction aof adiscussed aunder aarticles a3-5 aof athe a Hague aconventions. aIn athe afinal
a chapters aof athe aIV apart, athe aauthor amentions aabout afamily amaintenance aand amatrimonial
a property. aIt astates athat aBrussels aII aregulation adoes anot aapply ato athe amatrimonial aproperty
instead asuch amatters afall awithin athe ascope aof aBrussels aI aregulation.
a

The apart aV aof athe abook ais atitled ainsolvency. aIt atalks aabout ahow athe aBrussels aconvention ahas
a given aa aseparate aplace ato athe ainsolvency aproceedings awhich aare aplace abetween athe aindividuals
a of adifferent acountries. aAccording ato aarticle a1(2) a(b) aof athe aBrussels aConvention, ait astates athat
a the ainsolvency aproceedings aunder athe apreview aof aprivate ainternational alaw arequire aa adifferent
a set a of a rules a other a than a civil a and a commercial a disputes. a The a scope a of a the a insolvency
a regulation ais alimited ato acollective ainsolvency aproceedings awhich aalso aincludes adisinvestment
a of a the adebtor aand athe aappointment aof aa aliquidator aas awell. aThis aindicates athat ait aincludes aboth
a windupaproceedings aand areorganization aproceedings aas awell. aThe ainsolvency aregulation aof athe
a private ainternational alaw ais abased aon athe aprinciple aof aunity aand aproviding auniversality ato aall
a the alegal aframeworks aexisting ain athe aworld. aThis apart afurther adiscusses athe amain aproceedings
a of ainsolvency awith aregards ato aarticle a3(1) aof athe aBrussels aConvention. aIt ahas abeen afurther
a stated athat athe ainsolvency aregulation adeals awith athe achoice aof alaw aand aalso aon a the
a jurisdiction aof aother ajudgments. aIt ais afurther amentioned aby athe aauthor athat awhen aa ajudgment ais
a opened ain ainsolvency aregulation ait ais adone awith athe ahelp aof aarticle a20 aand aarticle a27 aof athe
a insolvency aregulation aprovided afor athe asecondary aproceedings aand ait acan abe aopened awith aor
a without athe adebtor’s ainsolvency. a

At athe aend aof apart aIV, athe aauthor amakes aan aattempt ato aanalyze athe aother aproprietary
a exceptions aof ainsolvency aregulation asuch aas aright ain arem, aimmovable aor aregistered aproperty,
a reservations aof atitle, apending aactions aagainst athe aproperty, aset aoff, afinancial amarkets. aIt aalso
a discusses athe arenvoi aand athe areflex aeffect aon athe ainsolvency aregulation aand ahow athey acontain
a no aprovisions aexplicitly aregarding ait. aIt astates athat awhenever asuch aissues aarise athe ainternal
a law a is a given a more a priority a over a others. aIn a the a last a part a of a the a book, a the a author
a discusses aabout athe amatters aof ainsolvency ain aprivate ainternational alaw. aThis apart adiscusses
a jurisdiction, achoice aof alaw, aand athe aenforcement aaspects aof ainsolvency ain aprivate ainternational
a law.
 CHAPTER a1

CONFLICT aOF aLAWS aIN aMATRIMONY aIN aINDIAN aCONTEXT

a

The ainstitution aof amarriage agives arise ato aobligations, aconjugal arelations aand acertain arights
a between athe aspouses aand athis ais athe areason awhy alaw aseeks athe adischarge aof athose amarital
a obligations. aIn aIndia, aconjugal aright ais abelieved ato abe ainherent ain athe avery ainstitution aof
a marriage aand anot aa amere acreation aof astatute.

But ain acases awhere aforeign aelement, ai.e. aPrivate aInternational aLaw, ais ainvolved, athen afor athe
a purpose aof aresolution aof aConflict aof alaws, athe aCourts aresort ato athe aPrinciples aof aComity aor
a Courtesy aand ain asome acases, athe aCourts aalso ause athe aPrinciple aof areciprocity.

Till adate, athere ais ano aspecific aand acogent alegislation ain aIndia awith aregards ato aNRI amarriages
a and athere ais aan aurgent aneed aof alegislative aintervention ain athis amatter aas adelivering aJustice ato
a all aby away aof alegislation ais afar amore asatisfactory away aof adispensing aJustice, athan adelivering
Justice aon aa acase aby acase abasis.
a

This aarticle awill abe aanalyzing athe aexisting ameasures athrough awhich athe aIndian aCourts adeal
a with aNRI amarriages aand awill aalso abe apointing aout athe aloopholes apresent ain athem.

MARRIAGE AND DIVORCE

The basic belief relating to marriage is that it is a sanctified union which joins two individuals
for life. Divorce is a serious issue which devastates the interest of the parties involved and
therefore the courts should make every attempt to save the marriage and should insist on the
performance of marital obligations.

Sharing of common life, including all the happiness and misery associated with it, is the
essence of marriage. Living together is a symbol of sharing such aspects of marriage, while
living apart indicates disruption of the essence of marriage and if this disruption goes on, then
it has the tendency of causing breakdown of marriage.

The ainstitution aof amarriage agives arise ato aobligations, aconjugal arelations aand acertain arights ato
a both athe aspouses aand atherefore athe alaw aseeks athe adischarge aof athese amarital aobligations.
a Withdrawal afrom astate aof athings ais aconsidered ato abe aviolation aof amarital aobligations aand
a duties.1 aMarital aobligations aare asafeguarded aand aprotected abecause athey aare aconsidered ato abe
a the afoundation aof aa afamily. aIn aevery afamily asystem, adivorce ais adiscouraged ato aa alarge aextent
a and ais apermitted aonly ain agrave acircumstances aand athat atoo ain aa amanner aspecified aby alaw.

The aSupreme aCourt ain aBipin aChander aJai aSingh aBhai aShah av aPrabhawati2observed athat
a withdrawal afrom aa astate aof athings, ai.e. a“the ahome”, ais adesertion. aFor adesertion ato abe aa aground
a of aDivorce aunder aSection a13(1)(ib) aof athe aHindu aMarriage aAct, a1955, atwo aconditions aneed
a to abe afulfilled. aFirstly, athere ahas ato abe aintention ato abring athe acohabitation ato aan aend
a permanently a(animus adeserendi) aand asecondly, athere amust abe afactum aof aseparation. aAlso,
a with aregard ato athe adeserted aspouse, aanother atwo aessential aconditions, ai.e. aabsence aof aconsent
a and aabsence aof aconduct agiving areasonable acause ato athe aother aspouse ato aform aintention ato
a desert athe amatrimonial ahome, ahas ato abe aproved aby athe acomplainant3.

Justice aChandrachud ain aN.G. aDastane av aS. aDastane4 asaid athat athe acourt ahas ato atake ainto
a consideration athe aparticular acouple athat ahas aapproached athe acourt, aand anot athe aideal acouple
a because aideal acouple awill aprobably anot aapproach athe acourt afor athe aresolution aof adifferences
a between athem. aLord aMacDermott ain aPreston aJones av. aPreston aJones5observed athat, awhile
a dealing awith acases ainvolving athe aissue aof adivorce, athere ashould abe astrict aenquiry aconducted
a and athe amarriage abond ashould anot abe aleft aaside alightly aas ait ainvolves athe astatus aof aparties.
a This aobservation ais astill arelevant ain aIndian acontext aand atherefore aevery apossible aefforts
a should abe amade ain aorder ato asave athe amarriage aand abring aabout areconciliation abetween athe
a parties.

MATRIMONIAL aPROBLEMS aFACED aAS aA aRESULT aOF aNRI aMARRIAGES

In aIndia, aover athe ayears, athe aissue aof aNRI amarriages ahas agained asubstantial aimportance aby
a virtue aof ait aassuming aalarming adimension adue ato athe afraudulent atrappings aof aIndian aWomen
a by athe aPeople aof aIndian aOrigin a(PIOs) aand aNon-Resident aIndians a(NRIs). aSince athere ais anot

1
Bipin aChander aJai aSingh aBhai aShah av aPrabhawati, aAIR a1957 aSC a176.
a
2
Ibid.
a
3 th
aMulla aHindu aLaw, a20 aed., aIndia.
4
aN.G. aDastane av aS. aDastane, aAIR a1975 aSC a1534.
5
aPreston aJones av. aPreston aJones,[1951] aA.C. a391, a417.
a any aspecific aand acogent alegislation awith aregard ato aNRI amarriages ain aIndia, athere ais aan aurgent
a need aof alegislative aintervention.

Matrimonial adisputes aare aalready aone aof athe amost acomplex aareas afor alegal aintervention aand ait
a becomes amore acomplex awhen aone aof athe aparties aof athe amarriage abelong ato aan aarea abeyond
a the aborders aof aIndia. aSuch amarriages athen aenter ainto aa amaze awhere athere ais aa aconflict aof alaws
a of adifferent anations.

There aare asome atypical aissues athat aarise ain aNRI amarriages awhich aare apointed aout aby athe
a National aCouncil afor aWomen aafter aconducting aresearch aon aactual acases ain adifferent anations.
a Some aof athem aare:

 Abandonment aof awomen aby aher ahusband aafter abeing ataken ato athe aforeign acountry.

 Brutal aassault, abattering aand aabuse aof awomen, aboth amentally aand aphysically, aby athe
a husband aand ahis afamily amembers.

 Capturing aand aholding aof athe awomen ain athe aforeign anation afor athe asake aof ahuge asum
a of amoney aas adowry.

 Giving afalse ainformation arelating ato athe ajob, asalary aand aproperty ato athe afamily
a members aof athe awomen abefore amarriage, aand alater aconning athe awomen ainto amarriage.

 Hiding aof athe astatus aof apre-existing amarriage aby athe ahusband.

 Husband awho ahas aobtained adivorce afrom awomen athrough aan aex-parte adecree aby
a making afalse arepresentations awithout aher aknowledge ain aother alegal asystems.

 Women aencountering ajurisdictional aobstacles ain aIndian aCourts adue ato aunavailability aof
a cogent alegislation ain athis aregard.6

CURRENT aLEGAL aSTATUS aON aDISPUTES aARISING aOUT aOF aNRI aMARRIAGES

In aorder ato adeal awith athe aforeign adecrees aof amatrimonial amatters, athere ais aa aneed aof awell-
developed aPrivate aInternational aLaw abody athat ahas athe apower aof arecognition, areorganization

6
a http://ncw.nic.in/PDFFiles/Book-NRI_Marriage.pdf; alast avisited aon aMarch a30, a2020.

a
a and asolemnization aof amarriages aalongwith achecking athe alegitimacy aof aa aforeign adecree aof
a divorce. aIn aIndia, athe arules aof aPrivate aInternational aLaw ais aeither ascattered ain adifferent
a legislations, ai.e. aSpecial aMarriage aAct, aForeign aMarriage aAct, aetc., aor ahave abeen aevolved aby
a the acourts. aBut athese aare anot acogent aenough ato adeal awith aall asort aof aissues athat aarise ain aa aNRI
a marriage aas athey aare adeeply abased aon athe aEnglish aRule aof aPrivate aInternational aLaw.

Although the courts in India have repeatedly appealed to the legislature for enacting a law
that seeks to prevent the injustices that are caused to the Indian wives of those NRIs who
obtain an ex parte decree of divorce without the knowledge of their wives, from courts of
foreign jurisdiction. There is also a need for such a provision in that enacted law that gives
recognition and solemnization of foreign marriages here.

In the case of Y. Narsimha Rao v Y. Venkata Lakshmi7, the SC held that jurisdiction
assumed as well as the grounds of decision made by the foreign court should be in
consonance with the matrimonial laws under which the parties are married.

Just like the European Nations did under the Brussels II framework on Regulation of
Recognition of Foreign Orders, India should also enter into bilateral/ multilateral agreements
with other nations for purpose of recognition of matrimonial decrees given in courts of
foreign jurisdiction.

THE aFOREIGN aMARRIAGE aACT aOF a1969

In aorder ato afulfill athe aassurance aof aa alaw athat awill adeal awith amarriages ain awhich aone aof athe
a party ais aa aforeigner, athe aParliament acame aup awith athe aForeign aMarriage aAct ain athe ayear
a 19698, awhich acontained aprovisions afor amarriages aof aIndians awho aare aresiding aoutside athe
a territories aof aIndia, aor aone aof athe aparties ato athe amarriage ais aa aforeigner. aIt ahas aborrowed amost
a of athe aprovisions afrom athe aForeign aMarriage aAct, a18929of aBritain aand aMarriage aAct,
a 196110of aAustralia.

7
Y. Narsimha Rao v Y. Venkata Lakshmi,1991 SCC (3) 451.
8
The aForeign aMarriage aAct, a1969.
a
9
aForeign aMarriage aAct a1892, aChapter a23 a(56 a& a56 aVict.).
10
aMarriage aAct a1961, aNo. a12, a1961.
Although athe aForeign aMarriage aAct awas aan aimprovement ain athis aregard, abut ait adoesn’t
a contain aany aprovision awhich aexplicitly adeals awith adivorce, anullity aof amarriage aand aother
a matrimonial areliefs. aAlso, ait ahas acertain aloopholes athat aare acritically aanalysed ahereafter:

1. Not aoverriding: aThe aprovisions aof athis aact aare aadditional aprovisions aand ado anot ahave
a overriding aeffect aover athe aexisting alaws awhich ameans athat ait ais adepended aupon athe
a discretion aof athe aperson awho ais amarrying aa aforeigner aor ais amarrying ain aa aforeign
a nation, ato adecide awhether athey awant atheir amarriage ato abe asolemnized aunder athis aAct
a or anot.

2. Incomplete aAct: aThis aAct acan abe asaid ato abe aan aincomplete aAct aas ait adeals awith aonly
a three afactors arelating ato aforeign amarriages, ai.e. asolemnization aof amarriage, aprocess aof
a solemnization aand athe aregistration aof amarriage. aApart afrom athese athree, athere ais ano
a provision adealing awith athe aissue aof adivorce, anullity aof amarriage, amaintainance,
a citizenship aof achild aborn aout aof asuch amarriages, aetc.

3. Inadequate aProvisions afor aPenalty: aBy avirtue aof aSection a1911 a2012 aand a2113 aof athe
a Act, ait ais aevident athat athe apunishments aand apenalties, aprescribed aunder athe aAct aapplies
a only ato athe aIndian aparty aof asuch aforeign amarriages aand athis ahas athe atendency aof
a limiting athe ascope aof athis aAct aas ain acases alike athat aof adesertion, awhere aone aof athe
a party afiles aa asuit afor adesertion aand athe aother achallenges athe asaid asuit aon athe aground aof
a marriage anot ato abe asubjected ato aIndian alaws, athen aanomaly awill abe acreated aby avirtue
a of aHindu aMarriage aAct abeing aonly aapplicable awhen aboth athe aparties aare aHindu. aSo, ain
a such acases, athe aforeign aparty awill aeasily aevade athe apunishment aand aonly athe aIndian
a party awill abe asubjected ato athe apenal aprovisions aof athis aact.

4. Use aof a‘may’ ain aSection a4 aand a17 aof athe aAct: aThe ause aof aword a‘may’ ain aSection a414
a and a1715 amakes athis aAct aan aenabling alegislation. aThis aact adoes anot acontain aprovision
a that amake athe asolemnization aand aregistration aof amarriage, aa acompulsion. aIn aorder ato
a make ait aa acompulsion, athe aact ashould ahave acontained athe aword a‘shall’ aor a‘must’ ain athe
a place aof a‘may’.

11
Section a19, aThe aForeign aMarriage aAct, a1969.
a
12
Section a20, aThe aForeign aMarriage aAct, a1969.
a
13
aSection a21, aThe aForeign aMarriage aAct, a1969.
14
aSection a4, aThe aForeign aMarriage aAct, a1969.
15
aSection a17, aThe aForeign aMarriage aAct, a1969.
SUGGESTIONS

In aIndia, athe alaws athat acan adeal awith athe aissues aarising ain aNRI amarriages aare ascattered ain
a different alegislations awhich amakes athe aamendment ain aso amany alegislations aa adifficult aand
a time-consuming atask, atherefore ait ais aproposed athat athere ashould abe asingle alegislation adealing
a with aall athe aissues aarising aout aof aNRI amarriages awhich acontain athe afollowing aframeworks:

 It ashould amake athe aregistration aof aNRI amarriages acompulsory, anotwithstanding aany
a existing aprovision aunder aany alaw.

 The NRI party should be required to compulsorily file an affidavit stating that he is
not already married or divorced, before the solemnization of marriage.

 There must also be amendment in the Indian Passport Act to provide a separate page
in the passport containing details regarding the marital status, photograph of spouse,
etc.

 The proposed law should also provide that the marriage between an Indian and an NRI
will only be legitimate within India if the marriage takes place under this Act.

 In order to protect the wife from ex parte decree that is usually obtained by the NRI
husband in case foreign marriage, the proposed law should specifically state that such
an ex parte decree that is obtained without the knowledge or consent of the wife shall
not be enforceable in India.

 The aproposed alaw ashould aalso aprovide afor aadoption aand achild acustody aof achild aborn
a out aof asuch aNRI amarriages.

 There ashould abe arecognition aof athe aproperty aof athe amarried acouple aas ajoint aproperty
a by alaw aand ait ashould abe adivided abetween aboth aof athem ain aaccordance awith athe
a provision aof alaw aand anot aaccording ato athe awhims aand afancies aof aforeign acourts.

 The aproposed alaw ashould aalso aprovide afor abilateral aco-operation abetween athe aIndian
a government aand athe aoverseas aauthority awith aregard ato athe aaggrieved awomen aabroad.
To athink aof a“Uniform aPrivate aInternational aLaw aRules” ais alike aa adream awhich awill anot acome
a true aand atherefore athere ais aa aneed ato aresort ato amore afeasible aoptions asuch aas abilateral
a agreement abetween anations aon aissues aarising aout aof amatrimony, alike aBritain ahas adone. aTo
a resolve athe aissue aof aconflict aof alaws ain amatrimony, athe aBritish aParliament acame aup awith athe
a Foreign aJudgments a(Reciprocal aEnforcement) aAct, a1933.16 aSection a1 aof athe asaid aAct atalks
a about abilateral aagreements abetween anations afor athe arecognition aof aforeign amarriages17

Also, aas aalready abeen adiscussed aabout athe acomplexities athat athe aIndian aCourts ahave ato aface ain
a the aabsence aof aa acogent alegislation awith aregard ato aNRI amarriages, athere ais aan aurgent aneed aof
a the aParliament ato atake acognizance aof athe amatter aand aenact aa alegislation apertaining ato ait.

16
a Foreign aJudgments a(Reciprocal. aEnforcement) aAct, a1933. a[23 aGEO. a5. aCH. a13.]
17
a Section a1, aForeign aJudgments a(Reciprocal. aEnforcement) aAct, a1933. a[23 aGEO. a5. aCH. a13.] a
 CHAPTER a2

LEGAL aFRAMEWORK aGOVERNING aCROSS-BORDER aINSOLVENCY aIN aINDIA

Usually, aa asituation aconcerning across-border ainsolvency aarises awhen athe adebtor ahas aassets aor
a creditors ain adifferent ajurisdictions aor awhen adifferent ainsolvency aproceedings ahave abeen afiled
a in amultiple ajurisdictions. aAs asuch, athe amechanism apertaining ato across-border ainsolvency ais
a primarily afocused atowards aregulating athe ainsolvency aproceedings athat aoperate amuch abeyond
a the arealm aof adomestic ajurisdiction aand athe aconstraints atherein. aBroadly aspeaking, athe
a following aaspects aare ainvolved ain aa across-border ainsolvency:

1. Equal aprotection aof athe ainterests aof adomestic aand aforeign acreditors;
2. Safeguarding athe avalue aof athe aassets aof aa adebtor, awhich aare alocated ain adifferent
a jurisdictions;
3. Coordination aand acooperation aamongst acourts aand ajudicial aauthorities ain avarious
a jurisdictions aand athe adomestic alaws aapplicable atherein;
4. Uniformity ain athe ainsolvency alaw aand apractices aof adifferent ajurisdictions.

In aIndia, athe aprimary alegislation agoverning ainsolvency aand abankruptcy ais athe aInsolvency aand
a Bankruptcy aCode, a2016 a("the aCode"). aHowever, aeven athough athe aCode ahas amade astrides ain
a drastically aharmonising athe ainsolvency aprocess ain aIndia, ait adoes anot aaccount afor aa asufficient
a procedure ato aregulate across-border ainsolvency aproceedings. aThe aCode aoffers atwo aprovisions
a that aassist ain across-border ainsolvency adisputes ai.e. aSection a234 aand aSection a235. aSection a234
a of athe aCode aempowers athe aCentral aGovernment ato aenter ainto abilateral aagreements awith aother
a countries afor apurposes aof aenforcing athe aCode.18 aSection a235 aof athe aCode aempowers athe
a adjudicating aauthority aunder athe aCode ato aissue aa aletter aof arequest ato aa acourt ain aa acountry ain
a which aan aagreement aunder aSection a234 ahas abeen aentered ainto, ato adeal awith aassets asituated ain
a that acountry ain aa aspecified amanner.

I. LIMITATIONS aOF aTHE aPREVAILING aFRAMEWORK

18
aSection a234: aAgreements awith aforeign acountries:

234(1) aThe aCentral aGovernment amay aenter ainto aan aagreement awith athe aGovernment aof aany acountry aoutside
aIndia afor aenforcing athe aprovisions aof athis aCode.

(2) aThe aCentral aGovernment amay, aby anotification ain athe aOfficial aGazette, adirect athat athe aapplication aof
aprovisions aof athis aCode ain arelation ato aassets aor aproperty aof acorporate adebtor aor adebtor, aincluding aa apersonal

aguarantor aof aa acorporate adebtor, aas athe acase amay abe, asituated aat aany aplace ain aa acountry aoutside aIndia awith

a which areciprocal aarrangements ahave abeen amade, ashall abe asubject ato asuch aconditions aas amay abe aspecified.
Except afor athe aabove-mentioned aprovisions ain athe aCode, athere's anot amuch alegal aframework
a for across-border ainsolvency ain aIndia. aAs asuch, athe apresent alegal asystem agoverning across-
border ainsolvency ain aIndia, acomes anowhere aeven aclose ato aaddressing athe areal aissues
a associated awith athe aprocess aand ahas amany adrawbacks, aincluding abut anot alimited ato athe aselect
a few alisted abelow:

1. Section a234 aand aSection a235 aof athe aCode ahave anot ayet abeen anotified aand ano asteps
a have abeen ataken ato aimplement athem. aTherefore, athe adevelopment aof aa across-border
a insolvency aregime ais amostly astill aup ain athe aair aand anot amany apositive asteps ahave abeen
a taken ain athat aregard.
2. India's awillingness aand aability ato anegotiate aand athen aenter ainto abilateral atreaties awith
a foreign agovernments ais aone aof athe apre-requisite afor athe asmooth afunctioning aof across-
border ainsolvency. aThe aburdensome anature aof athe atasks ainvolved aand athe atime
a required ain anegotiating aand afinalizing asuch atreaties acannot abe aundermined.
3. There aexists ano aprocedure ato adeal awith across-border ainsolvency aissues ain aa ascenario
a where athe aassets aor acreditors aof athe adebtor aare asituated ain aa acountry awith awhich ano
a bilateral atreaty ahas abeen aeffected.
4. Further, athere's anot amuch aguidance aon athe aprocess aand aoptions aavailable ato
a insolvency aprofessionals ato aavail aevidence aetc. ain aa acase awhere athe aassets aof aan
a Indian adebtor aare alocated ain aa adifferent ajurisdiction.
5. The aCivil aProcedure aCode, a1908 aprovides afor aa amechanism afor aenforcing aforeign
a judgments, ahowever athe asame ais anot abroad aenough ato ainclude aall ainsolvency aorders,
a for aexample, aorders aregarding areorganization aprocesses, aadministrative aorder aetc.
a Moreover, aprocedural aand ajurisdictional aissues asuch aas aparallel aproceedings,
a coordination, acooperation, aetc. aremain aunaddressed aby athe apresent asystem aconcerning
a cross-border ainsolvency acases.19

II. aGUIDELINES aON aCROSS aBORDER aINSOLVENCY aPROPOSED aBY aTHE

a INSOLVENCY aLAW aCOMMITTEE

A. aFeatures aof athe aUNCITRAL aModel aLaw aand aIndia's adraft aGuidelines

United aNations aCommission aon aInternational aTrade aLaw a("UNCITRAL") aModel aLaw aon
a Cross-Border aInsolvency, a1997 a("UNCITRAL aModel aLaw") aprovides afor alegislative

19
a http://www.mca.gov.in/Ministry/pdf/PublicNoiceCrossBorder_20062018.pdf
a guidance afor astates aon across-border ainsolvency. aThe aUNCITRAL aModel aLaw ahas abeen
a strongly arecommended afor aproviding aa awide-ranging asolution afor aresolving across-border
a insolvency aissues. aThe ainternational aaspects aof ainsolvency aproceedings ahave abeen
a acknowledged aby athe aWorld aBank, awhich ahas afurther anoted athat athe ainsolvency alaws ashould
a provide afor arules aof ajurisdiction, achoice aof alaw, acooperation aamongst acourts aof adifferent
a countries aand arecognition aof aforeign ajudgments. aFurther, athe aIMF aencourages athe aadoption
a of athe aUNCITRAL aModel aLaw aas athe asame awould aprovide afor aan aeffective ameans aof
a reducing athe adifficulties afaced ain across-border adisputes aand afurther ain aachieving acooperation
a and acoordination aamongst acourts aand aconcerned aauthorities ain adifferent ajurisdictions.

The four main principles governing the UNCITRAL Model Law are: Access, Recognition,
Cooperation and Coordination. It aims to provide the foreign professionals and creditors with
a direct access to domestic courts, which in turn enables them to participate and/or commence
domestic insolvency proceedings against the concerned debtor. In terms of recognition, the
UNCITRAL Model Law accounts for the recognition of foreign proceedings in domestic
courts and enables the courts to accordingly determine the relief to be granted. Further, the
UNCITRAL Model Law provides for bringing about effective cooperation between
insolvency professionals and courts of different countries and also ensuring coordination so
as to efficiently manage the conduct of concurrent proceedings in different jurisdictions. The
intent of the UNCITRAL Model Law seems to be to assist states to mould their insolvency
laws in a modern, harmonised and fair framework so as to address the instances of cross
border insolvency more effectively. It arespects athe adifferences ain avarious anational alaws aand
a primarily afocuses aon aimproving acooperation aand acoordination abetween acountries, ainstead aof
a attempting ato aunify athe anational alaws.

In aan aattempt ato aaddress athe ashortcomings aof athe apresent across-border ainsolvency
a mechanism, aor athe alack athereof, aIndia ahas areleased aa aset aof adraft aguidelines acontaining aa
a specific achapter ai.e. aPart aZ a("draft achapter") aon across-border ainsolvency. aThe abasis aof athese
a draft aguidelines ais afound ain athe aUNCITRAL aModel aLaw, aincorporating asome aminor
a modifications. aThese aguidelines awere arecommended aby athe aInsolvency aLaw aCommittee
a ("Committee") avide aits aReport asubmitted aon a16.10.2018.

In aits areport, athe aCommittee ahad arecommended athe ainclusion aof athe adraft achapter ain athe aIBC
a which acomprises aof a29 asections, awhich aessentially ainclude athe aGeneral aProvisions aand
a Public aPolicy aException, aAccess aof aForeign aRepresentatives aand aCreditors ato athe
a Adjudicating aAuthority, aRecognition aof aa aForeign aProceeding aand aRelief, aCooperation awith
a Foreign aCourts aand aForeign aRepresentatives, aConcurrent aProceedings aand asome
a miscellaneous aprovisions.3 aFew anoteworthy afeatures aof athe adraft achapter aare ahighlighted aas
a follows:

1. Application aof athe adraft achapter: aThe aapplicability aof athe adraft achapter ais alimited ato
a corporate adebtors aand athe asame adoes anot aextend ato aindividual adebtors aand apersonal
a insolvency. aThe arationale afor athis adistinction acould abe asaid ato abe aa acautious aapproach,
a as athe alegislature amight adeem ait abetter ato afirst aobserve aand astudy athe aimplications aof
a the adraft achapter aon acorporate adebtor, abefore aextending ait ato aindividual adebtors.

2. Reciprocity: aThe arequirement aof areciprocity ais acaptured ain athe adraft achapter,
a therefore ait awould aonly abe aapplicable ato athose aforeign acountries awhich ahave aalso
a adopted athe aUNCITRAL aModel aLaw ainto atheir adomestic alegal aframework. aAs asuch,
a it aleaves athe aquestion aof across-border ainsolvency aprocess awith acountries anot ahaving
a adopted athe aUNCITRAL aModel aLaw, astill aanswered.

3. Foreign amain aproceedings aand aforeign anon-main aproceedings: aTwo atypes aof
a foreign aproceedings aare adescribed ain athe adraft achapter, awhich acreates aa adistinction
a between aforeign amain aproceedings aand aforeign anon-main aproceedings. aIn athat
a context, aa aforeign amain aproceeding arefers ato aa aforeign aproceeding ataking aplace ain athe
a State awhere athe acorporate adebtor ahas athe acentre aof aits amain ainterests. aWhereas, aa
a foreign anon-main aproceeding ameans aa aforeign aproceeding, aother athan aa aforeign amain
a proceeding, awhich atakes aplace ain aa aState awhere athe acorporate adebtor ahas aan
a establishment. aSuch aa adistinction ais anecessitated aso aas ato aunderstand, adetermine aand
a demarcate athe alevel aof acontrol athat aa aforeign ajurisdiction acan aexercise aover athe
a insolvency aprocess ain aIndia aand afurther athe atype aand aextent aof arelief athat acan abe
a granted aby athe aAdjudicating aAuthority ain arelation ato asuch aforeign aproceedings.

4. Determination aof aCentre aof aMain aInterests a("COMI"): aUnder aSection a14 aof athe
a draft achapter, aguidance ais aprovided afor adetermination aof aCOMI. aIt aprovides afor aa
a prima afacie apresumption athat athe acorporate adebtor's aregistered aoffice ais aits aCOMI,
a unless athere ais aproof ato athe acontrary. aHowever, athis apresumption awould abe aapplicable
a provided athat athe aregistered aoffice aof athe acorporate adebtor ahas anot abeen amoved ato
a another aState awithin athree amonths aprior ato athe acommencement aof ainsolvency
 a proceedings ain asuch aState. aIt afurther aprovides athat athe aAdjudicating aAuthority awill
a conduct aan aassessment aof awhere athe acorporate adebtor's acentral aadministration atakes
a place ain aorder ato adetermine athe acorporate adebtor's aCOMI. aSuch aassessment amight
a also ainclude afactors aas aprescribed aby athe aCentral aGovernment, aand ashould abe acarried
a out ain aa amanner athat ais aascertainable aby athird aparties, aincluding athe acreditors aof athe
a corporate adebtor.

B. aBenefits aand aimplications aof aimplementing athe adraft achapter

It ais aworth anoting athat aaround a51 ajurisdictions ahave aadopted athe aUNCITRAL aModel aLaw aso
a as ato aeffectively acope aup awith athe achallenges aof across-border ainsolvency aproceedings.4
a Along awith athe aadvantage aof ahaving areciprocity ain acountries alike aSingapore, aU.K. aand aUS,
a amongst amany aothers athat ahave aadopted aand aimplemented athe aUNCITRAL aModel aLaw,
a India awould aadditionally abe aable ato aavail athe afollowing abenefits aby aadapting athe aUNCITRAL
a Model aLaw ain athe aform aof athe adraft achapter, ain aits alegislative aframework: a

1. Economic abenefits: aEnacting aan aeffective across-border ainsolvency alaw awould aresult
a in aincreased apredictability aand acertainty aof ainvestment aframework aand athereby
a making aIndia aan aattractive ainvestment adestination afor aforeign acreditors.
2. Flexibility: aThe adraft achapter arespects athe adifferences aamongst adifferent anational
a laws aon ainsolvency aand aprovides afor adeviations ato abe amade afrom athe aUNCITRAL
a Model aLaw aso aas ato abest asuit athe adomestic aconditions aand amaintain aconsistency awith
a domestic ainsolvency alaw.
3. Protection aof adomestic ainterest aand apublic apolicy aexception: aThe adraft achapter
a allows athe arefusal aof arecognition aof aforeign aproceedings aor aprovision aof aany aother
a assistance, aif ain acase asuch aaction awould abe amanifestly acontrary ato aIndia's apublic
a policy. aTherefore, apublic ainterest aand apublic apolicy ais aput aat aa ahigher athreshold aand
a limitations aare aimposed aon aforeign acreditors, adebtors aor aother ainterested apersons, aso
a as ato aprevent athe aabuse aof athe alaw aand aprocess aby asuch aparties.
4. Precedence ato adomestic ainsolvency aproceedings: aUnder athe adraft achapter,
a supremacy ais aprovided ato athe aproceedings ainitiated aunder athe aCode. aTherefore, aonce
a proceedings aare acommenced aunder athe aCode, athe aAdjudicating aAuthority ahas athe
a discretion ato anot arecognize aany aproceeding ainconsistent awith ait aand acommenced
a under athe aprovisions aof athe adraft achapter.
 5. Remedy ain ajurisdictions awith areciprocity: aMany acountries ahave aenacted athe
a UNCITRAL aModel aLaw awith aa arequirement aof alegislative areciprocity, awhich ameans
a that asuch aa acountry awould agrant arecognition, acooperation aetc. ato aIndian aproceedings
a only aif aIndia ahas aadopted athe aUNCITRAL aModel aLaw ain asome away. aTherefore,
a adopting athe adraft achapter awould ago aa along away ain aassisting aIndian acreditors aand
a professionals ato areceive aassistance afrom asuch areciprocating acountries, ain aeffectively
a addressing aissues arelated ato across-border ainsolvency aproceedings.
6. Domestic aand aglobal amechanism afor acorporation: aThe adraft achapter aprovides afor
a direct acooperation aand acoordination abetween acourts aand ainsolvency aprofessionals, ain
a foreign ajurisdictions aas awell aas adomestically. aSuch aa amechanism amight aassist ain
a enabling aconsistency ain athe asystem aand aresult ain aa auniform aline aof ajudicial adecisions
a and arulings aand aprovide afaster aand aeffective aassistance ain acase aof aconcurrent
a proceedings.20

III. aJET aAIRWAYS aCASE: aINDIAN aJUDICIARY'S aNOTEWORTHY aENCOUNTER

a WITH aCROSS aBORDER aINSOLVENCY aDISPUTE

A. aParallel ainsolvency aproceedings ain aIndia aand aNetherlands

In athe ayear a2019, athe aNational aCompany aLaw aAppellate aTribunal a("NCLAT") agave aa aruling,
a consequent ato awhich aJet aAirways a(India) aLimited a("Jet aAirways") abecame athe afirst aIndian
a company ato abe asubjected ato across-border ainsolvency. aNCLAT's aruling aset aa aleading
a precedent ain athe aevolving ainsolvency alaw ain aIndia aas ait adirected athe aconduct aof aa a"Joint
a Corporate aInsolvency aResolution aProcess" aunder aIBC.

It aall abegan awhen aState aBank aof aIndia afiled aa aSection a7 aapplication aagainst aJet aAirways, aupon
a the aadmission aof awhich athe aCorporate aInsolvency aResolution aProcess a("CIRP") aof aJet
a Airways awas acommenced aon aJune a20, a2019. aFollowing athis, athe aadjudicating aauthority awas
a aware aof athe afact athat aa aDutch aCourt ahad aalready ainitiated ainsolvency aproceedings aand aa
a Bankruptcy aAdministrator awas aappointed ain aNetherlands ato atake acharge aof aJet aAirways'
a assets alocated atherein. aThe asame awas adone aat athe ainstance aof aa abankruptcy apetition awhich
a was afiled aby atwo aEuropean acreditors aagainst aJet aAirways afor aclaims aof aunpaid adues
a amounting ato anearly aINR a280 acrores. aThe aEuropean acreditors awere aseeking athe aseizure aof

20
a Available aat: ahttps://uncitral.un.org/en/texts/insolvency/modellaw/cross-border_insolvency/status
a one aof athe aJet aAirways' aBoeing a777 aaircraft aas athe asame awas aparked ain athe aSchiphol aAirport
a in aAmsterdam.

B. aNCLT's aDecision aon athe aCross-Border aInsolvency

Subsequent ato aJet aAirways' aadmission ato aCIRP ain aIndia, athe aBankruptcy aAdministrator
a appointed aby athe aDutch aCourt amoved athe aNational aCompany aLaw aTribunal, aMumbai aBench
a ("NCLT") apraying afor athe arecognition aof athe ainsolvency aproceedings ain athe aNetherlands.
a The aAdministrator aalso arequested athe aNCLT ato awithhold athe aCIRP aon aaccount aof athe
a ongoing abankruptcy aproceedings aagainst aJet aAirways ain athe acompetent acourt, awhich aderived
a its ajurisdiction aunder aArticle a2(4) aof athe aDutch aBankruptcy aAct. aIt awas ahighlighted athat
a occurrence aof atwo aparallel ainsolvency aproceedings ain adifferent ajurisdictions awould aadversely
a affect athe arestructuring aprocess aand ahave aa adetrimental aimpact aon athe acreditors ainvolved.

The aprimary aissue athat awas aconsidered awas apertaining ato athe ajurisdiction aof athe acourts ain
a Netherlands ato aadjudicate aupon aand apass asuitable aorders ain athe amatter arelating ato athe
a bankruptcy aof aJet aAirways awhich ais aregistered aand aincorporated ain aIndia.

However, athe aNCLT arefused ato awithhold athe aIndian ainsolvency aproceedings. aThe abasis
a provided afor athe asame awas athat aSection a234 aand aSection a235 aof athe aCode, adeal awith across-
border ainsolvency aand athey awere anot ayet abrought ainto aeffect. aHence, athe aNCLT aheld athat ain
a absence aof asuch aa alaw, athe aBankruptcy aAdministrator awas abarred afrom aparticipating ain athe
a Indian ainsolvency aproceedings aand afurther adeclared athat aongoing aproceedings ain aNetherlands
a were anull aand avoid.

C. aAppeal abefore athe aNCLAT aand aits aruling

The aBankruptcy aAdministrator, abeing aaggrieved aby athe aNCLT's adecision, amoved aan aappeal
a against athe asame ain athe aNCLAT. aAs asuch athe aNCLAT aallowed athe aappeal ain athe afollowing
a manner:

1. NCLAT aset aaside athe aorder apassed aby athe aNCLT aupon aan aassurance abeing aprovided
a by athe aBankruptcy aAdministrator athat ait awould anot aalienate aany aoffshore aassets aof aJet
a Airways.
2. NCLAT aallowed athe aBankruptcy aAdministrator ato acooperate awith athe aResolution
a Professional aas aappointed aunder athe aCode aand aalso ato aparticipate ain athe ameetings aof
 a the aCommittee aof aCreditors, ahowever aonly ato athe aextent aof aobserving aand apreventing
a any alikely aoverlap aof apowers.

Further, athe aNCLAT aensued acooperation abetween athe aIndian aparties aand athe aDutch
a counterpart ain aorder ato afinalise aa aresolution aplan athe awould abe ain athe abest ainterest aof athe aJet
a Airways aand aall aits astakeholders.

.Pursuant to the directions of the NCLAT, the Resolution Professional under the Code and the
Bankruptcy Administrator, which was appointed by the Dutch Court, mutually agreed upon a
"cross-border insolvency protocol" which was essentially construed on the basis of the
principles provided in the UNCITRAL Model Law. Thereby, India was recognised as the
"centre of main interest" and the proceedings being held in Netherlands were taken as the
"non-main insolvency proceedings". Therefore, the case of Jet Airways presents itself to be
an interesting study relevant to the legal position pertaining to cross-border insolvency
proceedings in India as it highlights an earnest attempt by the Indian judiciary to be a front-
runner in evolving principles and effecting mechanisms to deal with cross-border insolvency
proceedings.21

IV. CONCLUSION

The aUNCITRAL aModel aLaw, ain aessence, aprovides aa afairly aindependent aframework awhich
a allows athe aconcerned ajurisdiction ato aevaluate aand athereby adecide athe aoperational anitty agritty
a best asuited ato athat acountries alegal alandscape. aAs asuch, athe aUNCITRAL aModel aLaw aoffers aa
a wide ascope aof abenefits aand aclarity aw.r.t. across-border ainsolvency adisputes.

However, aas ahighlighted aabove, apresently athere aexists anot amuch aof aa alegal aframework afor
a addressing across-border ainsolvency adisputes ain aIndia. aEven aif athe atwo aprovisions aas aprovided
a in athe aCode aare anotified aand aimplemented, athey asuffer afrom avarious ashortcomings aand awould
a not abe aable ato aprovide aa acomprehensive amechanism afor across-border ainsolvency
a proceedings. aAs asuch, aeventually athe adraft achapter arecommended aby athe aCommittee awould
a have ato abe aadapted aand aincluded ain athe aCode, athereby aresulting ain athe aintroduction aof
a various aamendments aand arules ato aaccommodate athe adraft achapter.

21
http://www.mca.gov.in/Ministry/pdf/constitutionOrder_30012020.pdf
In aJanuary a2020, aMinistry aof aCorporate aAffairs ahad aconstituted aa aspecial acommittee ato
a further aunderstand aand arecommend athe anecessary arules aand aregulatory aframework afor aa
a smooth aimplementation aof aproposed across aborder ainsolvency aprovisions ain athe aCode.5
a However, athere adoes anot aseem ato abe amany aupdates aon athe aprogress amade aby athe asaid
a committee aregarding atheir awork aon athe ainclusion aof across-border ainsolvency aprovisions ain
a the aCode.

Having asaid athat, ait acannot abe aignored athat aa alot aof aprocedural aand alegal achallenges awould
a have ato abe aaddressed afor athe aeffective aadaptation aand aimplementation aof athe adraft achapter.
a However, aonce athe ahard awork ais acarried aout aand athe ahurdles aare amet, athe alegal aframework
a could aensure acooperation aand acommunication abetween adifferent ajurisdictions aand
a successfully aaddress athe aresolution aof across-border adisputes aconcerning aIndia.