Cross-border and group insolvency under the IBC Amendment Act 2026 rest on two new provisions: Section 240C, which lets the Central Government prescribe rules for recognising and cooperating with foreign insolvency proceedings, and Chapter VA, which does the same where two or more companies in a group go through insolvency together. Neither provision is in force. The commencement notification of 22 May 2026 brought most of the Act into effect from 26 May 2026 but left both of these out, and no rules have been framed under either. Until that changes, Indian tribunals handle cross-border and group cases exactly as they did before the Act, through case-by-case protocols and judicial improvisation.
This article sets out what the IBC Amendment Act 2026 actually did on cross-border and group insolvency, what it deliberately left to subordinate rules, and what has to be resolved before either framework can operate.
Section 234 of the Insolvency and Bankruptcy Code, 2016 and Section 235 have sat in the Code since the day it commenced. Neither has ever been used. No bilateral treaty has been signed under Section 234, and no letter of request has been issued under Section 235. That decade of disuse is the fairest yardstick for judging what Section 240C will actually deliver.
The gap got filled by tribunals instead. In 2019, the National Company Law Appellate Tribunal (NCLAT) approved a negotiated protocol between an Indian resolution professional and a Dutch bankruptcy administrator, and the National Company Law Tribunal (NCLT) in Mumbai consolidated thirteen group companies into a single insolvency estate. Both were built on nothing. There was no statutory hook for either.
The 2026 Act finally supplies the hook. But it supplies it as a rule-making power rather than a framework, which means the shape of the regime depends entirely on rules that do not yet exist.
What is already in force and what is not
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 came into force in stages, and the cross-border and group insolvency provisions are not among the stages that have happened. The Act received Presidential assent on 6 April 2026 and sits on the books as Act No. 6 of 2026, originating from Bill No. 107-F of 2025. Section 1(2) of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 allowed the Central Government to appoint different dates for different provisions, and that is exactly what it did.
On 22 May 2026, the Ministry of Corporate Affairs issued notification S.O. 2625(E), appointing 26 May 2026 as the commencement date for a specified list of provisions. The list is long and covers most of the Act: sections 2 to 6, 8 to 33, parts of section 34, 35 to 39, 41, 43 to 44, 46, 48 to 59, 61 to 66, 68, parts of sections 69 and 70, and section 72.
Read that list again and notice what is missing. Section 42 of the Amendment Act, which inserts Chapter VA on group insolvency, is not there. Section 71, which inserts Sections 240B and 240C, is not there either.
So the position today is straightforward, even if most published commentary suggests otherwise. Both frameworks are enacted. Neither is commenced.
No rules have been framed under either, no countries have been notified, and no special benches have been designated. A practitioner advising a client this week is operating in the pre-Act world, with the same tools available in 2019.
Everything else about the Code works as it did. The amendments that did commence on 26 May 2026 change the domestic process in real ways, and the broader framework of the Insolvency and Bankruptcy Code, 2016 is the right starting point for readers who want the machinery underneath. This article stays on the two provisions that didn’t commence.
The provisions left out of the commencement notification
| Clause | Inserts | Subject | Status as on 17 July 2026 |
|---|---|---|---|
| 42 | Chapter VA, Section 59A | Group insolvency | Not in force |
| 71 | Section 240B | Electronic portal | Not in force |
| 71 | Section 240C | Cross-border insolvency | Not in force |
| 9 | Amendments to Section 14 | Moratorium | In force from 26 May 2026 |
| 43 | Section 61(6) | Three-month NCLAT appeal timeline | In force from 26 May 2026 |
| 44 | Section 64A | Penalty for frivolous proceedings | In force from 26 May 2026 |
Worth flagging: a persistent error has crept into published analysis of this Act, and correcting it matters because readers searching for the right section number are being sent to the wrong one. Some commentary describes the cross-border framework as sitting in “Sections 240B to 240C” and places group insolvency in “Chapter VI-A”. Both are wrong.
Section 240B deals with an electronic portal for insolvency processes and has nothing to do with cross-border matters. Group insolvency sits in Chapter VA, and the operative provision is Section 59A. The Gazette text settles it.
Why enabling provisions commence late
The delay isn’t administrative sloth, and it isn’t accidental. Both provisions are pure rule-making powers, which means commencing them without rules in place would achieve nothing at all. Think of it this way: you’d have a section in the Code conferring a power that no one had yet exercised.
There is a second reason, and it is the more interesting one. Under Section 59A of the Insolvency and Bankruptcy Code, 2016, a draft of every rule proposed under that section must be laid before each House of Parliament for thirty days, and if both Houses agree in disapproving the rule, it cannot be notified at all. Section 240C(3) applies the same machinery to the cross-border rules. That scrutiny takes parliamentary time, and it can only start once drafts exist.
Does this mean the provisions will sit dormant like Sections 234 and 235? Not necessarily. Those sections required foreign governments to sign treaties, which India never did. These require nothing more than the Central Government to draft rules and Parliament not to object.
The practical reality is that the bottleneck has moved from diplomacy to drafting, which is a meaningfully easier problem.
Cross-border insolvency under Section 240C
Section 240C of the Insolvency and Bankruptcy Code, 2016 gives the Central Government power to prescribe how cross-border insolvency proceedings are administered, rather than setting out the framework itself. It was inserted by section 71 of the 2026 Amendment Act, immediately after Section 240A, alongside the unrelated electronic portal provision in Section 240B.
The operative language is short enough to quote. Section 240C(1) provides that notwithstanding anything to the contrary in the Code and the Companies Act, 2013, the Central Government may prescribe the manner and conditions for administering and conducting cross-border insolvency proceedings, “including the process for recognition of proceedings, granting relief, judicial cooperation, assistance and coordination in connection with such proceedings, for such class or classes of debtors or corporate debtors involving such countries or territories outside India, as may be notified by the Central Government in this regard.”
That single sentence carries the whole regime. It also carries a gate that most coverage has skated past.
The four limbs the rules must cover
The four limbs named in Section 240C(1) are not decorative. They map exactly onto what the Select Committee of the Lok Sabha asked for when it reported on the Bill on 17 December 2025: the rules must specify the process for recognition of foreign proceedings, for granting relief, for judicial cooperation, and for assistance and coordination.
Recognition is the foundation. Without it, a foreign administrator has no standing before an Indian tribunal, which is precisely what went wrong in 2019. Relief is what follows recognition: a stay, an asset freeze, an order preserving value while the main proceeding runs.
Judicial cooperation covers direct communication between an Indian bench and a foreign court, something Indian tribunals currently have no framework for. Assistance and coordination is the operational layer, covering how two sets of professionals actually run parallel processes without tripping over each other.
Section 240C(2) adds the machinery. Rules may apply provisions of the Code, or of the Companies Act, 2013, with “such exceptions, modifications and adaptations” as required, and this expressly includes designating one or more Benches to deal with cross-border proceedings. So the statutory basis for a specialist bench already exists. Whether it gets used is a rules question, and worth flagging early: that single choice will do more for outcomes than most of the drafting around it.
The notified country gate
The notified country gate is the clause that decides how much of Section 240C ever applies, and it is the part most coverage leaves out. Section 240C does not operate at large. It operates only for “such countries or territories outside India, as may be notified by the Central Government.”
No country has been notified. There is no list.
This matters more than the rules themselves, and it deserves to be said plainly: the notified list, not the rulebook, is the real switch. India could publish a technically excellent set of Model Law rules tomorrow and, if the accompanying list named three countries, the regime would touch a sliver of actual cross-border distress. Conversely a modest rulebook covering Singapore, the United Kingdom, the Netherlands and the United Arab Emirates would reach most of the cases that actually arise.
A common question practitioners raise is whether this amounts to a reciprocity requirement through the back door. Formally, no: nothing in Section 240C conditions notification on another country extending equivalent treatment to India. Practically, the discretion is unfettered, and unfettered discretion over a list is where reciprocity bargaining tends to live.
The Explanation to Section 240C is worth noting for what it fixes. It clarifies that “corporate debtor” includes any person incorporated with limited liability outside India. Without it, there would have been a live argument that a foreign-incorporated entity falls outside the Code’s definitions entirely, which would have made the recognition machinery unusable in exactly the cases it was written for.
Draft Part Z compared with Section 240C
The contrast with what was proposed is stark. The Insolvency Law Committee’s second report, submitted on 16 October 2018, annexed a draft Part Z running to thirty-one sections, adapted from the UNCITRAL Model Law on Cross-Border Insolvency and limited to corporate debtors. A Cross-Border Insolvency Rules and Regulations Committee was constituted in January 2020, reported in June 2020, and its draft went out for public comments in November 2021.
| Draft Part Z (2018) | Section 240C (2026) | |
|---|---|---|
| Length | 31 sections in the Code | One enabling section |
| COMI test | Defined in the draft | Left to rules |
| Recognition | Codified procedure | Left to rules |
| Relief | Codified, automatic and discretionary | Left to rules |
| Scope | All corporate debtors | Only notified countries |
| Parliamentary scrutiny | Ordinary legislative process | 30-day laying, both-House veto |
| Status | Never enacted | Enacted, not commenced |
And this is where the Select Committee’s report becomes genuinely revealing. The Committee made two asks on cross-border insolvency. The narrow one, that the drafting should put beyond doubt that foreign-incorporated persons are covered, was accepted and appears as the Explanation. The broad one, that the basic tenets of cross-border insolvency should be written into the Code itself rather than left wholly to subordinate legislation, was not.
PRS Legislative Research has flagged the same concern, noting that the approach relies entirely on subordinate legislation and raises questions about excessive delegation of essential legislative functions.
One ask accepted, the other declined. That asymmetry tells you how the framework will be built: by the executive, on its own timetable, subject to a parliamentary veto that has never once been exercised in this area.
Group insolvency under Chapter VA and Section 59A
Group insolvency under Chapter VA applies where insolvency proceedings are initiated against two or more corporate debtors that form part of a group, and Section 59A of the Insolvency and Bankruptcy Code, 2016 leaves the mechanics to rules the Central Government has yet to make. Section 42 of the Amendment Act inserts the new Chapter into Part II of the Code, immediately after Chapter V.
Section 59A(1) is the enabling power, and it follows the same architecture as its cross-border cousin. Notwithstanding anything to the contrary in the Code, the Central Government may prescribe the manner and conditions for conducting insolvency proceedings under Part II where those proceedings are initiated against two or more corporate debtors forming part of a group.
But Chapter VA is not the empty shell that description suggests. And the reason is the Explanation, which most coverage has skipped past entirely.
What the group insolvency rules can provide for
Section 59A(2) lists six matters the rules may cover. This is the clearest statement available of what Indian group insolvency is meant to look like:
- A common Bench for the insolvency proceedings of group companies, and the manner of transferring pending proceedings to that Bench.
- Coordination between proceedings, including coordination between the committees of creditors and the interim resolution professionals, resolution professionals, or liquidators of each company.
- A common insolvency professional, appointed and replaceable, to facilitate coordination across the group’s proceedings.
- A committee comprising the committees of creditors of the group companies.
- A coordination agreement that synchronises different aspects of the proceedings, binding on the corporate debtors that approve it (including their committees of creditors), with the Adjudicating Authority empowered to issue orders implementing it.
- Treatment of the costs incurred in coordinating the proceedings.
Read the six together and a picture emerges. Every one of them is about coordination. A common bench, a common professional, a joint committee, a binding synchronisation agreement, and a rule for splitting the bill.
What is absent is any express power to pool assets and liabilities into a single estate. That silence is doing work, and the coordination-versus-consolidation section below takes it up.
Section 59A(3) rounds this out by allowing the rules to apply provisions of the Code with such modifications as required. Which is a broad power, and in a framework this thin, broad powers are the only thing holding it together.
Who counts as a group, and the 26 percent line
Who counts as a group is settled already, by the Explanation to Chapter VA rather than by any rule. This is the part of the framework that has teeth, because those definitions do not wait for commencement.
A “group” means two or more corporate debtors interconnected by control or significant ownership, and it includes a holding company, a subsidiary company and an associate company of a corporate debtor as defined under the Companies Act, 2013. “Significant ownership” includes the right to exercise twenty-six per cent or more voting rights. “Control” is drawn expansively: the right to appoint a majority of the directors or key managerial personnel, or to control the management or policy decisions, exercisable by persons acting individually or in concert, directly or indirectly, whether through shareholding, management rights, ownership interest, shareholders agreements, voting agreements, articles of association, limited liability partnership agreements “or in any other manner.”
Twenty-six per cent is a low bar. It’s well below the fifty-per-cent-plus-one that most people associate with control, and it is deliberately aligned with the threshold at which a shareholder can block a special resolution. Add the “acting in concert” language and the “in any other manner” catch-all, and the perimeter is wide enough to capture structures that nobody would describe as a group in ordinary commercial speech.
So what does this mean in practice? Any conglomerate can measure itself against Chapter VA today, without waiting for a single rule to be notified. The test is published, it is numeric, and it is checkable against a shareholding register.
The mistake we see most often on new legislation is treating an uncommenced provision as irrelevant to present planning. That’s wrong here, and the section on what this means for practice explains why the reverse is closer to the truth.
The Code’s foundational machinery still applies underneath all of this. For readers who need the groundwork, the corporate insolvency resolution process under the IBC and the role and functions of the committee of creditors set out the single-company process that Chapter VA is designed to coordinate across multiple debtors.
Group insolvency, Chapter VA
Section 59A(2): the six rule-making heads
-
(a)Common Bench
A common Bench for the insolvency proceedings of group companies, and the manner of transferring pending proceedings to it.
-
(b)Coordination between proceedings
Including coordination between the committees of creditors and the interim resolution professionals, resolution professionals or liquidators.
-
(c)Common insolvency professional
Appointment and replacement of a common insolvency professional to facilitate coordination across the group.
-
(d)Committee of committees
Formation of a committee comprising the committees of creditors of the group companies.
-
(e)Coordination agreement
A binding agreement synchronising the proceedings, which the Adjudicating Authority may order to be implemented.
-
(f)Costs
Treatment of the costs incurred in coordinating the proceedings.
Verbatim from Section 59A(2)(a) to (f), Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act No. 6 of 2026), Gazette text.
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The cases that shaped both frameworks
Both frameworks were built by tribunals before Parliament wrote them down, and the case law explains what the rules are trying to codify. This is not a history lesson. Every mechanic in Section 240C and Section 59A traces back to a specific improvisation that a bench reached for because the Code gave it nothing.
The Jet Airways protocol
The airline was declared bankrupt in the Netherlands for non-payment of two European creditors while a corporate insolvency resolution process was already running in India. Two proceedings, two jurisdictions, one company, and a Code with no answer.
The NCLT in Mumbai took the strict view on 20 June 2019, holding the Dutch proceedings null and void in India and barring the Dutch administrator from the committee of creditors and from making claims against Indian assets. Three months later, on 26 September 2019, the NCLAT in Jet Airways (India) Ltd. v. State Bank of India & Anr., Company Appeal (AT) (Insolvency) No. 707 of 2019 reversed. The Indian resolution professional and the Dutch administrator negotiated a Cross-Border Insolvency Protocol drawing on UNCITRAL Model Law principles. India was recognised as the centre of main interests, the Dutch proceeding was treated as non-main, the Dutch administrator was held functionally equivalent to an Indian resolution professional, and clause 6.1.2 of the protocol let the Dutch administrator attend committee of creditors meetings “as an observer but shall not have a right to vote in such meetings.”
Two tribunals. Identical facts. Opposite answers. Three months apart.
That split is the strongest argument for Section 240C anyone has made.
What experienced practitioners know is that the protocol worked only because both office-holders chose to cooperate. Nothing compelled the Dutch administrator to negotiate, and nothing would have compelled a less accommodating counterpart. A framework that depends on the goodwill of the person across the table is not a framework. It is a happy accident that held.
The principles the protocol borrowed are set out in the UNCITRAL Model Law on cross-border insolvency, which India has still not adopted.
Videocon and substantive consolidation
The group side has its own founding case, decided the same year. A lender filed fifteen separate applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 against companies in the same group. The NCLT’s Principal Bench transferred every matter to Mumbai to stop conflicting orders from issuing out of different benches.
On 8 August 2019, the Mumbai bench in State Bank of India v. Videocon Industries Ltd. & Ors., MA 1306/2018 consolidated thirteen of the fifteen, pooling assets and liabilities under a common resolution professional and a common committee of creditors. Two companies were left out because they were financially sound and lacked operational interdependence with the rest.
Look at what the tribunal actually did there. It transferred proceedings to a common bench to avoid conflicting orders, appointed a common professional, and ran a common committee. Those are, almost word for word, the first three matters listed in Section 59A(2). The statute is codifying an order that a bench improvised seven years ago because nothing in the Code offered it a cleaner route.
The parameters the tribunal used to decide which companies belonged in the pool are set out in the order itself: common control, common directors, common assets, common liabilities, interdependence, interlacing of finance, pooling of resources, co-existence for survival, intricate link of subsidiaries, intertwined accounts, inter-looping of debts, singleness of economics of units, and common financial creditors. Keep those thirteen in mind, and note that the bench said the list was not exhaustive and could not be. They matter again in the section on what this means for practice.
Six weeks later the appellate tribunal went the other way on structure while reaching a similar destination. In Edelweiss Asset Reconstruction Co. Ltd. v. Sachet Infrastructure Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) Nos. 377-385 of 2019, decided on 20 September 2019, the NCLAT allowed simultaneous group insolvency against five entities that had consolidated land under one developer for a single integrated township project, using the phrase “a group insolvency is required to develop the township.” That order is authority for coordinated proceedings rather than merged ones, which is the lighter-touch model Section 59A(2)(b) to (e) points toward. Earlier group consolidation reasoning from both tribunals is covered in more depth in this analysis of NCLT and NCLAT views on group consolidation in insolvency.
One case needs to be cleared out of the way, because it gets miscited in this context with some regularity. Macquarie Bank Ltd. v. Shilpi Cable Technologies Ltd., (2018) 2 SCC 674 is not a cross-border insolvency case. The Supreme Court of India held that Section 9(3)(c) of the Insolvency and Bankruptcy Code, 2016 is directory rather than mandatory, and that a lawyer may issue a demand notice on an operational creditor’s behalf.
The cross-border flavour is real but narrow: requiring a certificate from an Indian financial institution would have shut out foreign creditors who bank abroad, which the Court treated as discrimination offending Article 14. So it is good authority on foreign creditor access to a domestic process. It says nothing about recognising a foreign proceeding.
And then there’s the counterpoint. When the airline sector produced its next cross-border collision, in the Go First insolvency filed under Section 10 of the Insolvency and Bankruptcy Code, 2016 in May 2023, the conflict was not resolved inside the Code at all. Foreign lessors had already terminated their leases and held deregistration authorisations under the Cape Town Convention when the moratorium caught them.
The answer, when it came in April 2024, came from the Delhi High Court directing the aviation regulator to process the deregistration applications on the footing that a Central Government notification exempting aircraft from the moratorium operated retrospectively. Executive notification and a writ court. The Code sat that one out entirely.
Which brings us to the pattern behind all of it. In ten years, no Indian judgment has recognised a foreign insolvency proceeding as such. Not one.
Jet Airways came closest and got there by agreement rather than by recognition. That absence is the hole Section 240C was drafted to fill.
Cross-border and group insolvency in India
From Jet Airways to Section 240C: ten years, two dead sections, and one gap
Step taken
Key moment
Gap: dashed outline
2016IBC enacted
Sections 234 and 235 provide for bilateral treaties and letters of request.
2016 to 2026Never usedGap
No treaty signed under Section 234. No letter of request issued under Section 235.
16 Oct 2018Draft Part ZGap
Insolvency Law Committee annexes a thirty-one section Model Law adaptation. Never enacted.
8 Aug 2019Videocon
NCLT Mumbai consolidates 13 of 15 group companies. Substantive consolidation, built without a statutory hook.
20 Sep 2019Sachet Infrastructure
NCLAT permits group CIRP across five entities. Early appellate use of the term group insolvency.
26 Sep 2019Jet AirwaysKey moment
NCLAT approves a cross-border protocol with the Dutch administrator. India recognised as COMI, by agreement rather than by statute.
Nov 2021Draft rules out for comment
Cross-Border Insolvency Rules and Regulations Committee draft released for public comments.
12 Aug 2025Bill introduced
IBC (Amendment) Bill 2025 introduced in Lok Sabha and referred to a Select Committee the same day.
17 Dec 2025Select Committee reports
Asks that the basic tenets of cross-border insolvency be codified in the Code. Not accepted.
6 Apr 2026AssentKey moment
Act No. 6 of 2026. Section 240C and Chapter VA are on the statute book.
26 May 2026Commencement, minus twoGap
S.O. 2625(E) commences most of the Act. Clause 42 (Chapter VA) and clause 71 (Section 240C) are left out.
Dates verified against the Gazette (Act No. 6 of 2026), MCA notification S.O. 2625(E), PRS Legislative Research, and IBBI reports.
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What the cross-border rules must resolve
The cross-border rules have to answer four questions that Section 240C of the Insolvency and Bankruptcy Code, 2016 leaves open, and each answer will decide how much the regime is actually worth. None of these are drafting details. Each one is a policy choice that the Act declined to make.
The COMI question
Centre of main interests is the hinge the whole Model Law turns on. It decides which country runs the main proceeding and which runs a secondary one, which in turn decides whose law governs, whose court leads, and in practical terms whose creditors do better.
Section 240C says nothing about it. Not the test, not the timing, not the burden.
Under the Model Law the registered office is presumed to be the centre of main interests, and that presumption is rebuttable. Every hard question lives in the rebuttal.
What is the relevant date for the assessment, the date of filing or the date the proceeding opens? Who carries the burden when a creditor says the real nerve centre is elsewhere? What factors count: where the board meets, where the treasury sits, where the workforce is, where creditors thought they were dealing?
Get the relevant date wrong and you build in an incentive that will be exploited. If the assessment runs to the date of filing, a distressed group can shift its head-office functions before it files and manufacture a friendlier main proceeding. Forum shopping is not a theoretical risk in cross-border insolvency. It is the default behaviour of sophisticated debtors, and the only thing that suppresses it is a test that is hard to game.
The Jet Airways protocol simply asserted India as the centre of main interests and moved on, which was sensible on those facts and useless as precedent. Without a defined framework, the next bench has nothing but discretion.
Reciprocity and the notified country list
The reciprocity question is the one the drafting has already half-answered, without saying so.
Consider the two models. The United Kingdom, the United States and Singapore all recognise foreign proceedings on a case-by-case basis without demanding that the other country extend equivalent treatment first. India’s Section 240C instead limits the framework to notified countries, which functionally makes the list a reciprocity instrument whether or not anyone calls it that.
| India (Section 240C) | United Kingdom | United States | Singapore | |
|---|---|---|---|---|
| Recognises a foreign proceeding | Only where the country is notified by the Central Government | Case by case | Case by case | Case by case |
| Equivalent treatment demanded first | In effect, through the notified list | No | No | No |
| Framework operating today | No. Clause 71 was left out of S.O. 2625(E) | Yes | Yes | Yes |
| Countries currently within reach | None. No list has been published | Not limited by a list | Not limited by a list | Not limited by a list |
Is that wrong? Not obviously. There’s a respectable argument that a country with limited institutional bandwidth should open the door selectively rather than to everyone at once.
But the failure mode is well known: a reciprocity gate produces a chicken-and-egg standoff, where each country waits for the other to move first, and a decade passes. That’s the Section 234 story, told again with different machinery.
The list will also become something the drafters may not have anticipated. Creditor jurisdictions with real exposure to Indian assets (Singapore, the United Kingdom, the Netherlands, the United Arab Emirates) have an obvious interest in early notification, and their absence from an initial list would be read as a signal about India’s posture rather than as an administrative sequencing decision.
The Gibbs Rule
The Gibbs Rule is the obstacle that rules made under Section 240C cannot clear, because it is a rule of English law and not of Indian law.
The Gibbs Rule is an English common law principle holding that a debt governed by English law can only be discharged according to English law. A foreign insolvency proceeding, however properly conducted and however duly recognised, does not discharge it.
Follow that through. An Indian resolution plan is approved. It binds every creditor under Section 31 of the Insolvency and Bankruptcy Code, 2016 as a matter of Indian law. A creditor holding English-law-governed debt then sues in London on the original contract, and the English court is not obliged to treat the Indian discharge as effective.
No rule made under Section 240C can fix this, because the obstacle sits in another country’s law. Recognition is a two-way street and India can only pave its own side. The most a domestic framework achieves is inbound: giving foreign proceedings effect here. Whether an Indian plan travels outbound depends on what English, Singaporean or American courts choose to do with it.
Frankly, this gets overlooked in most Indian commentary, which tends to treat cross-border insolvency as a problem India solves by legislating. Half of it is not ours to solve.
Interim relief, access and the bench that hears it
Three smaller questions round out the list, and they’re smaller only in the sense that they are more tractable.
Should a foreign representative be able to approach an Indian tribunal directly, or only through an Indian office-holder? Direct access is the Model Law position and it saves a layer of cost and delay. Should relief be available before recognition is decided, given that recognition takes time and assets can move in days? An interim freeze pending the recognition decision is the standard answer, and its absence would make the framework useless in exactly the urgent cases it exists for.
And which bench hears any of it? Section 240C(2) already permits designating one or more Benches. A former Judicial Member of the NCLT, writing in June 2026, argued that the tribunal as currently constituted is overburdened, that a sophisticated statute cannot compensate indefinitely for inadequate institutional bandwidth, and that a single bench (Mumbai or Delhi) should be designated for cross-border matters.
That view carries weight it would not carry from an outside commentator, and it points at the real constraint. Recognition machinery without bench capacity is a rule that produces a listing date eighteen months out.
Cross-border insolvency, Section 240C
The route a foreign office-holder takes, and where it stops
1
Is there a foreign insolvency proceeding over a company with Indian assets?
Yes
▼
2
Can the foreign representative apply to an Indian tribunal for recognition?
BlockedNo statutory route. Section 240C is not in force.
▼
3
Is the country on a notified list under Section 240C(1)?
BlockedNo list exists. No country has been notified.
▼
4
Is there a bilateral treaty under Section 234?
BlockedNone has ever been signed.
▼
5
Has a letter of request issued under Section 235?
BlockedNone has ever been issued.
▼
6
What is actually left?
WorkaroundA negotiated protocol between office-holders, approved case by case. The Jet Airways route.
Open questions the rules must answer
- COMI: what test, what relevant date, who bears the burden?
- Reciprocity: which countries get notified, and on what basis?
- Gibbs: an Indian plan may still not bind English-law debt, whatever the rules say.
- Bench: will one be designated under Section 240C(2)?
Structure reflects Section 240C(1) limbs and the gaps identified in the Select Committee report of 17 December 2025.
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Coordination or consolidation
Chapter VA points toward coordinating group proceedings rather than merging them, and the difference decides who gets paid. This is the single most consequential open question in the group framework, and the statute does not resolve it.
Start with the distinction, because the two get used interchangeably and they are not the same thing. Procedural coordination keeps each company’s estate separate while synchronising the machinery around them: a common bench, a common professional, coordinated committees, an agreed timetable. Substantive consolidation goes further and collapses the estates, pooling assets and liabilities so that creditors of every pooled company claim against one combined pot.
The difference is not procedural housekeeping. It’s distributional. Under coordination, a creditor of a healthy subsidiary still looks to that subsidiary’s assets. Under consolidation, that creditor now shares those assets with creditors of the sickest company in the group.
| Procedural coordination | Substantive consolidation | |
|---|---|---|
| The estates | Kept separate | Collapsed into one |
| Assets and liabilities | Stay with each company | Pooled |
| A creditor claims against | Its own debtor’s assets | One combined estate |
| Machinery | Common bench, common professional, coordinated committees, agreed timetable | One estate, one committee of creditors |
| Section 59A(2) | All six rule-making heads point here | No express pooling power |
| Indian precedent | Sachet Infrastructure, group CIRP run in parallel | Videocon, 13 of 15 companies pooled |
Where the line currently sits
Go back to the six matters in Section 59A of the Insolvency and Bankruptcy Code, 2016. Common bench, coordination between proceedings, common professional, a committee of committees, a binding coordination agreement, cost-sharing. Every one is procedural. Not one expressly authorises pooling assets and liabilities into a single estate.
Compare that with what the Mumbai bench actually did in the Videocon matter, which was substantive consolidation in the full sense: pooled assets, pooled liabilities, one estate, one committee. The judicial practice went further than the statutory language now goes.
So has Parliament quietly narrowed the tribunals’ hand? Probably not, and here’s why: Section 59A(3) lets the rules apply Code provisions “with such modifications, as may be required”, which is capacious enough to carry a pooling power if the drafters want it to. But it would be an odd way to authorise something that redistributes value between creditor groups, and a rule doing that on the back of a general modification power would be an inviting target for challenge.
The concerns practitioners raise about consolidation are not abstract, and they sharpen once you take the 26 per cent perimeter seriously. If a solvent group company is pulled into a pooled estate, its creditors (who lent against that company’s balance sheet, at a price set by that company’s risk) are diluted by the failures of entities they never underwrote. What stops a dominant group member from pushing for consolidation precisely because it improves its own recovery? And how does a committee of committees function coherently when each constituent committee’s composition is fixed by its own company’s creditor mix, with voting thresholds that were never designed to aggregate?
There’s a further wrinkle that the rules will have to face squarely. Coordination across group companies registered in different states is an administrative problem, solvable by the common bench in Section 59A(2)(a). Coordination across group companies incorporated in different countries is not, because that is a cross-border problem wearing a group costume, and it lands back in Section 240C with its notified-country gate.
A group with an Indian holding company and a Singapore subsidiary needs both frameworks to work, and both to be commenced, and Singapore to be on a list that doesn’t exist. That combination is not close.
What this means for practice
For anyone advising a group or a foreign creditor, the 2026 Act changes planning assumptions well before it changes procedure. Nothing about the dormancy of these provisions makes them safe to ignore, and the reasons are not the ones you would guess.
Start with the profession. Coordinating a group resolution across jurisdictions demands a skill set that barely exists in the Indian insolvency bar: fluency in Model Law concepts, the ability to negotiate a protocol with a foreign office-holder, and enough comfort with foreign counsel to know when a recognition application is worth making. The people who have it learned it on Jet Airways and Go First, and there aren’t many of them.
What follows is a two-tier profession rather than an upgraded one. A domestic-only credential stays perfectly adequate for the mid-market CIRP, and stops being enough at the top, where the fees are. The profession’s own entry framework, and the route through the Insolvency Professional examination, currently tests none of this. (Insolvency professionals already coordinating with foreign counsel and administrators may find the economics of international remote work relevant, since much of that coordination happens across time zones rather than in a room.)
Now the part that deserves more attention than it gets. Codifying group insolvency may accelerate exactly the behaviour it was meant to catch.
Think about what has actually happened. The Videocon parameters (interlacing of finance, pooling of resources, common control, common directors, and the rest) were judicial factors, applied after the fact, weighed by a bench on the facts of a particular group. They were hard to plan around because nobody knew in advance how a tribunal would weigh them. Section 59A of the Insolvency and Bankruptcy Code, 2016 publishes a numeric perimeter: 26 per cent of voting rights, plus a control test with defined limbs.
A published checklist is a planning document. The competent response, from the general counsel of a large conglomerate, is to run the group against that test today and engineer around it: arm’s-length intra-group pricing, separate lending relationships per entity, genuinely independent boards at the crown-jewel subsidiary, no shared treasury.
Every one of those steps is lawful. Every one of them makes a future consolidation order harder to obtain. Codification supplies the roadmap for avoidance, and it does so years before the first rule is notified.
For foreign lenders, the guidance is simpler: price the rules, not the assent. An Act that authorises a framework changes nothing about recovery prospects on a defaulted Indian exposure. What would change them is a notified list that includes the lender’s jurisdiction, a rulebook with workable relief, and one decided case showing the machinery runs. Sophisticated credit committees will wait for the third of those, not the first.
So what should you actually watch for? Three things, in order.
Draft rules being laid before Parliament, which starts a thirty-day clock and is the first public signal that either framework is moving. The first notified countries, which will tell you more about the regime’s reach than the rules themselves. And any designation of a cross-border bench under Section 240C of the Insolvency and Bankruptcy Code, 2016, because that is the difference between a framework on paper and a framework with a listing date.
Until at least the first of those happens, the honest answer to “does India have a cross-border insolvency regime?” is the same one it has been since 2016.
Frequently asked questions
1. Have Section 240C and Chapter VA been notified yet?
No. MCA notification S.O. 2625(E) dated 22 May 2026 brought most of the IBC Amendment Act 2026 into force on 26 May 2026, but the list excludes section 42 (which inserts Chapter VA) and section 71 (which inserts Sections 240B and 240C). Both frameworks are enacted but not commenced, and no rules have been framed under either.
2. When does the IBC Amendment Act 2026 come into force?
In stages. The Act received assent on 6 April 2026 as Act No. 6 of 2026, and Section 1(2) lets the Central Government appoint different dates for different provisions. Most of the Act commenced on 26 May 2026. The cross-border and group insolvency provisions have no commencement date yet.
3. What is cross-border insolvency?
Cross-border insolvency is where an insolvent company has assets, creditors or proceedings in more than one country, so a single jurisdiction’s process cannot resolve the whole estate. It raises questions of which country runs the main proceeding, whether a foreign proceeding is recognised locally, and how courts and office-holders in different countries cooperate.
4. What is COMI and how is it determined?
COMI, or centre of main interests, decides which country hosts the main insolvency proceeding, with proceedings elsewhere treated as non-main. Under the UNCITRAL Model Law the registered office is presumed to be the COMI, rebuttable by evidence that the company’s real nerve centre is elsewhere. Section 240C does not define COMI, so the test, the relevant date and the burden of proof all await the rules.
5. What is group insolvency?
Group insolvency is where insolvency proceedings run against two or more companies that belong to the same corporate group, and are handled together rather than in isolation. Chapter VA of the Code, once commenced, will let the Central Government prescribe how that happens, covering a common bench, a common insolvency professional, coordinated committees of creditors and a binding coordination agreement.
6. Who qualifies as a group under Chapter VA?
The Explanation to Chapter VA defines a group as two or more corporate debtors interconnected by control or significant ownership, including a holding, subsidiary or associate company as defined under the Companies Act, 2013. “Significant ownership” includes the right to exercise 26 per cent or more voting rights, and “control” is defined expansively to include the right to appoint a majority of directors or to control management or policy decisions, whether directly or indirectly.
7. What is the difference between substantive consolidation and procedural coordination?
Procedural coordination keeps each company’s estate separate and synchronises the process around them, through a common bench, a common professional and coordinated committees. Substantive consolidation merges the estates so that assets and liabilities are pooled and creditors claim against one combined estate. The six matters listed in Section 59A(2) are all coordination-flavoured; none expressly authorises pooling.
8. What is the difference between main and non-main foreign proceedings?
A main proceeding runs in the country where the debtor has its centre of main interests, and generally attracts the widest relief, including an automatic stay under the Model Law. A non-main proceeding runs where the debtor merely has an establishment, and attracts narrower, discretionary relief. Section 240C does not yet draw this distinction; the rules will have to.
9. Has India adopted the UNCITRAL Model Law?
No. India has not adopted the Model Law. The Insolvency Law Committee drafted a Part Z based on it in 2018 and that draft was never enacted. Section 240C instead empowers the Central Government to make rules that may draw on Model Law principles, for notified countries only.
10. What is the Gibbs Rule and why does it matter to India?
The Gibbs Rule is an English common law principle under which a debt governed by English law can only be discharged under English law, so a foreign insolvency proceeding does not discharge it. It matters because an Indian resolution plan binding all creditors under Section 31 may still leave English-law debt enforceable in London. No rule made under Section 240C can change that, because the obstacle lies in another country’s law.
11. Does India require reciprocity for recognition?
Not in express terms. But Section 240C only operates for countries or territories notified by the Central Government, which makes the notified list function as a reciprocity gate whichever way it is described. No country has been notified so far, so the practical answer today is that India recognises nothing automatically.
12. If a company is bankrupt in one country, can that bankruptcy be brought to another country?
Only if the second country has a mechanism to recognise the foreign proceeding, and India currently does not. In the Jet Airways matter, the NCLAT achieved something close to this through a negotiated protocol rather than through recognition, because there was no statutory route. Section 240C is meant to create one, but it is not in force.
13. What happens to ongoing CIRPs when the Act commences?
For the provisions already commenced on 26 May 2026, the amended Code applies subject to the transitional position for each provision. For cross-border and group insolvency, the question does not arise yet, since neither provision has commenced. Any transitional treatment for pending group matters is likely to be dealt with in the rules themselves.
14. Can a foreign representative approach an Indian tribunal directly?
Not as of now. There is no statutory right of direct access for a foreign representative, which is why the Dutch administrator in the Jet Airways matter had to be brought in through a negotiated protocol and admitted to the committee of creditors as a non-voting observer. Direct access is a standard Model Law feature and is one of the choices the Section 240C rules will need to make.
15. Will a special NCLT bench hear cross-border matters?
It is permitted but not yet decided. Section 240C(2) expressly allows the rules to designate one or more Benches for cross-border proceedings. A former Judicial Member of the NCLT has argued for designating a single bench in Mumbai or Delhi, on the reasoning that the tribunal is already overburdened and cross-border work needs concentrated expertise.
16. What does the amendment change for insolvency professionals?
Nothing operationally, until the rules arrive. Strategically it signals that group and cross-border coordination will become part of the job at the top of the market, requiring Model Law fluency, protocol negotiation and comfort working alongside foreign office-holders. Section 59A(2)(c) contemplates a common insolvency professional across a group’s proceedings, which is a materially different mandate from running a single CIRP.
17. How do you become a registered Insolvency Professional in India?
Under the IBBI (Insolvency Professionals) Regulations, 2016, the route runs in four steps: clear the Limited Insolvency Examination, enrol as a professional member of an Insolvency Professional Agency, complete the pre-registration educational course that agency conducts, and then apply to the Insolvency and Bankruptcy Board of India for registration. Chartered accountants, company secretaries, cost accountants and advocates with ten years of experience in that capacity are eligible on that route.
References
Case Law
- Edelweiss Asset Reconstruction Co. Ltd. v. Sachet Infrastructure Pvt. Ltd. & Ors., Company Appeal (AT) (Insolvency) Nos. 377-385 of 2019. NCLAT, 20 September 2019
- Jet Airways (India) Ltd. v. State Bank of India & Anr., Company Appeal (AT) (Insolvency) No. 707 of 2019. NCLAT, 26 September 2019
- Macquarie Bank Ltd. v. Shilpi Cable Technologies Ltd., (2018) 2 SCC 674. AIR 2018 SC 498; Supreme Court of India, 15 December 2017
- State Bank of India v. Videocon Industries Ltd. & Ors., MA 1306/2018. NCLT Mumbai, 8 August 2019 (official order PDF; not indexed on Indian Kanoon)
Statutes
- Insolvency and Bankruptcy Code, 2016. Sections cited: 7, 9(3)(c), 10, 14, 31, 61(6), 64A, 234, 235, 240A
- Companies Act, 2013. Referenced for the definitions of holding, subsidiary and associate company
- Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act No. 6 of 2026). Sections cited: 1(2), 9, 42, 43, 44, 71, 72; inserts Chapter VA / Section 59A and Sections 240B and 240C, neither commenced
Secondary sources
- Ministry of Corporate Affairs notification S.O. 2625(E) dated 22 May 2026
- Insolvency Law Committee, second report on cross-border insolvency, 16 October 2018. Draft Part Z at Annexure II
- Select Committee of the Lok Sabha, report on the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, presented 17 December 2025
- PRS Legislative Research, legislative brief on the Insolvency and Bankruptcy Code (Amendment) Bill, 2025
- Report of the Cross-Border Insolvency Rules and Regulations Committee, June 2020. Released for public comments November 2021
- IBBI (Insolvency Professionals) Regulations, 2016. Registration route in FAQ 17
This article is for informational purposes only and does not constitute legal advice. For specific legal guidance, consult a qualified legal professional.
