Understanding Cross-Border Insolvency Concepts

So, after the break, we will complete the part of cross border insolvency. When I say cross border insolvency, I will write that those corporate debtors having Assets or creditors. Assets or creditors in more than one country. In more than one country. In more than one country, if that company, which we are talking about corporate data, if that company has assets in more than one country, or if it has creditors in more than one country, So there comes the provisions of cross border insolvency. But this cross border insolvency is important in itself because as globalization is increasing, It is very easy to do business across the globe. Companies have many vendors across the globe. There are customers. And we say that globalization is a very big reason to increase the importance of cross border insurance. Why did they have to bring cross border insolvency? Why did they have to bring the majors and legislation of cross border insolvency? Because the national insolvency law of every country is different from the national law of any other country National insolvency law will match, it is not necessary. There will be some ambiguity, there will be some confusion. So, this ambiguity and confusion will not remain. That is why, United Nations, first of all I will say UNGA, United Nations General Assembly, about cross border insolvency they announced a legislative text in 1966 in 1966 they announced a legislative text they told every member country that the guidelines we are giving the legislations we are giving they should be kept in mind What should I do with the law of insolvency of your country? Frame it. Make it. So that was a legislative guide. That was a legislative guide text for framing the law of insolvency. But later the UN thought that the guidelines we are giving those guidelines are being adopted by every member according to their convenience. The legislative text, the legislative guideline. So the UN has adopted a model law. What is it called? United Nations International Commission Commission on Trade and Law. They announced a model law called Unicetral model law on insolvency bankruptcy which we have announced about cross border insolvency. Our Insolency Bankruptcy Committee in 2018, just last year, Insolency Bankruptcy Committee, they have given a recommendation to the government to adopt this model law. Till now, the IBC code which was in 2016, in that, somewhere, this model law of UNICETL, till now, 100% follow was not happening. Just last year, the government was recommended that the IBC Code 2016 should adopt the whole unicentral model law. So I will say, this chapter, first of all we have to do cross border The doctor has to study in three parts. One is the part of the UNICITRAL. What is UNICITRAL? United Nations Commission on International Trade and Law. He has to study from their point of view. Then he has to study the development of the World Bank legislative development and cross border insolvency. and a US Bankruptcy Code The US Bankruptcy Code is in our notes on the page number 4 of Marathon it is also given in chapter number 1 US Bankruptcy Code It is given here, one stop point, here are some points which we will discuss The historical evolution of Indian Insolvency Code there is also reference of US Bankruptcy Code When I say Unicetral then there you see below after these three points in Unicetral they have given Unicetral Key Objective of effective and efficient insolvency law and legislative guide on insolvency law and model law on cross border insolvency. Now you understand, there is one legislative guide and one model law.. What is the main objective of UNICITRAL? Effective and efficient insolvency law. UN has different units. Like there are different departments in the company. By the way, UNGA has a separate unit, a separate part, UNICITRAL. UNICITRAL. The main objective is to bring worldwide efficient and effective insolvency law. And with this, they have also brought legislative guide, which has been updated from time to time and also introduced model law. Everyone is there, right? Then down there, In our existing IBC Code 2016, section 234 and 235 are about cross border insolvency. That too is given in this chapter. And what I said about the Insolvency Law Committee on Cross Border Insolvency recommendations. Write it down. Everyone, write it down. On 16th October 2018, write it down. On 16th October 2018, the ILC on 16th October 2018, the ILC recommended adoption of recommended adoption of Unicetral model law of CBI Unicetral model law of CBI CBI means Cross Border Insurgency What you think is CBI is not CBI Unicetral model law of CBI Cross-Border Insolvency And pay attention, this has just been recommended in 2018 And in June 2019, you see the question on model law in the exam In June 2019 exam, this question is asked Insolency Law Committee's recommendation was on 18 October 2018 In June 2019, they have asked questions on Model Law in the exam. Anyways, but you should have understood from that particular hint. When we read, we get an idea. But we have to read this in this chapter. Then I will say, A P No. 60 Come to chapter 8 first. In this chapter, the first part we have to read is what is called cross border insolvency and what are the key objectives of cross border insolvency. who is called cross border insolvency? we have seen it just now that point is given there insolvency is a financial distressed debtor means corporate debtor what is the financial position of that corporate debtor? he is very distressed he has a lot of burdens he has assets or creditors in more than one country or jurisdiction he is called cross border insolvency what is the other name of that? international insolvency but objectives of efficient and effective insolvency regime are as follows. This is also a question asked in the exam. What are the objectives of cross border insolvency? So those objectives, in the form of an acronym, we say met fret. I have made it like this, met fret. One. Rhythmic word is made by this, METFET METFET, M stands for Maximization of Value Is everyone there? E stands for Equitable Treatment, Treatment of Creators, Equitable Treatment T stands for Timely and Impartial Resolution of Insolvency Is this met? Is everyone there? Then Again, equitable distribution to creditors. Equitable distribution to creditors. Then, transparent and predictable insolvency law. Is this the E.T. of FRED? Say it. then g.2 is a part of f only recognition of existing creators rights and and establishing rules of ranking of priority claims that is recognition recognition of existing creator rights and priority claims i below and ff framework framework framework for cross-border insolvency So in this, in MET, first it was ABC, in FRET, the framework is... Is everyone here? SS-7, what is it? Key objectives of an efficient and effective cross-border insurgency point. If we see that these objectives are more or less... Are they also in IBC? If any... Insolvency professional when he will make a resolution plan for a company when he makes a resolution plan for that company the liquidator liquidator also goes for liquidation this is company's insolvency professional who are market participants who help to make a resolution plan Keep in mind that maximum value of assets is there So, the company which is going into insolvency then why not cross border Objective will definitely be maximization of value of assets Creditors should have equitable treatment Equitable distribution between the creditors Timely and impartial resolution of insolvency Transparent and predictable insolvency law Recognition of existing creditors rights and priority claims, framework, establishment of framework of cross border insolvency, we can say establishment of proper framework of IBC. The objective is the same like objective we discussed in IBC also. and say brother but the question is what is cross border insolvency what are the objectives for efficient and effective cross border insolvency then below that you see this point UN Central Model Law on CBI That is cross border transparency. What I had said was they give a guide and one is text. The guide is used in a different area and text in a different area. What they have said is unicital. I want you to write the meaning first. Write it up there. Now write UNGA write it there. UNGA dash Uncitral, Uncitral, Uncitral, bracket become 1966, dash, prepares international legislative text, prepares international legislative text. and non-legislative texts International legislative text and non-legislative texts So, for use by common parties for use by common parties in negotiating In negotiating transactions, were used by common parties, In negotiating transactions, two minutes, Unline legislative text. How will you unline? Legislative text. Then unline non-legislative text. The non-legislative text is the best example. Whatever is non-legislative, text hai uske upar se arbitration and consolation act jo hai India mein frame hai na arbitration and consolation act ye non-legislative text ke tar se adopt hua hai aur jo legislative text hai uske taith hum insolency bankruptcy code dekhte hai to legislative text matlab kya hai jisko lekar aap law banaoge wo text jisko lekar law banaoge aur non-legislative text matlab jisko lekar aap rules banaoge Look, whatever I say, you will understand. The legislative text, means the text on which you will make legislation, law. Yes, international commercial arbitration, you have to make law on that, legislative text. But arbitration and consultation have rules. Rules, proceedings, they have to be decided. Non-legislative text. That text will be used only for the rules. Non-legislative, right? So this is how it is made. Unicetral is a legislative text or non-legislative text. It is recommended by both. It is recommended by both by preparing. People adopt that. Now this unicetral model law, again it is a legislative text. Because we are talking about adopting unicetral model law in our IBCM. So what is unicetral model law? It is a legislative text prepared by the unicetral which is a body of UNGA. I am repeating UNCITRAL MODEL LAW is a legislative text prepared by UNCITRAL which is a body of UNGA UNGA has a small part say it Like under central government comes state government or under central government comes parliament. After parliament we can say that parliament is Lok Sabha Vidhan Sabha. And we say, is this the president's accent? Similarly he says, United Nations. We see United Nations Environment Programme United Nations UNEP Environment Programme That organisation That environment We will be doing global warming This UN CITRAL We will be doing international trade and law UN body UN body That body is making legislative text That is making model law And by making model law, every member of the country is asking to adopt this model law First you have to understand that. Everyone is there, right? Then what should you read? Model law is a legislative text recommended to the states for enactment as a part of national law with or without modification. Now it will seem easy. Say brother, this text of UN Central, every state, state means who? The members. To adopt them. Model laws are comprehensive set of legislative solutions to address a particular topic and direct incorporation of provisions or... of model law. Direct the incorporation of provisions of model law. So what is the UN CITRAL model law? It is a legislative text which the UN CITRAL has asked every state and member to adopt for their national law. Now these model laws have some principles that are adopted in these principles are adopted in 44 countries. As on date, 44 countries have adopted their law insolence. to make a model law? Say it. There are enough member countries of the UN. But how many countries have adopted the principles of model law from the member countries of the UN till today? 44 countries. What are the principles of model law? One is access. One is recognition. Second is cooperation and co-ordination together. And I request you all to add one more there. Relief Cooperation condition quick south low and relief and grow now The access get the access people apply except to direct access What can you write? Direct access, then recognition, then cooperation and coordination, then relief. When I see this, the first point is access. Access means what? Direct access to foreign insolvency, just cut that proceedings, it is professionals. Foreign insolvency professionals and creditors to participate or commence domestic insolvency proceedings against the debtor. Oh oh oh Model law says Those foreign insolvency professionals And those foreign creditors They should give direct access to participate in domestic insolvency proceedings against the debtor in your country. Model law is being introduced. Model law says that even if the external creator is not there, the external professional can participate in it. Today, we can appoint an external person as an internal resolution professional. If the external creditor is an Indian company, can the external creditor apply for the Indian company for insolvency? So they say, give direct access to the foreign insolvency professionals and creators to participate or commence domestic insolvency proceedings against the data. I hope it is clear. Give them access. Along with giving access, give them recognition. Give recognition to whom? Listen. Give recognition to foreign proceedings. In their country, the procedures, foreign proceedings and provisions of remedies. Write below. Example. Example, orders issued by foreign courts. What will you write? Orders issued by... Tell me, what does foreign courts mean? If an order has been issued against an Indian company in a foreign court, then that particular order has been enforced by the authorities of the Insolvency Bankruptcy Court in India, right? Only then it will be recognized, right? When they have been given recognition, it means that their orders are valid here. Give direct access to foreign professionals and foreign creditors. Give recognition to foreign orders. Then, show cooperation and coordination. How much cooperation? Between domestic and foreign courts and insolvency practitioners. One will say, I will do it right, you will come, Supant. Will you help each other? and that is why we will move ahead with marathon listen carefully between domestic and foreign courts and insolency practitioners and then coordination between two or more concurrent insolency proceedings in different countries concurrent means same time when at the same time two different countries are having insolency proceedings Proper coordinate karo, dono ke jo orders hongi hai, wo ek duje ke saath mil kar discuss kar ke pass karo. Hey, say it. Keep in mind, the principles of Model Law, how many countries have adopted these principles? 44. They say, we will give direct access. We will give recognition to your foreign court orders. We will do coordination and cooperation. And then relief, you write relief there, everyone. Below relief. It is a basic principle. It is a basic principle. Necessary. For the orderly and fair conduct, basic principle necessary for the orderly and fair conduct of CBI. orderly and fair conduct of CBI what does it mean? orderly means in a structured way fair means equal justice principle of justice fair conduct of CBI write that in the next line that is automatic stay you write automatic stay upon recognition of main proceedings Automatic stay upon recognition of main proceedings. What does it mean? Automatic stay upon recognition of main proceedings. Relief, isn't it? Relief. So relief says that any company against which CBI, cross border insurancy, the proceedings have started, all the proceedings against them in the court, they will get automatic stay. We are seeing the same thing. See, no further petition can be filed against that company without the permission of the tribunal. They present it in different ways to give relief. How to give relief? If you want to make that cross border insolvency smoothly, effectively and fairly conducted, then all the main proceedings against them, they have to be brought to an automatic stay. Is everyone here? This is a little bit... After a break, after eating, when we discuss, he understands better. Everyone is here, right? Sure? So, once understand these principles, tell me. If he understands what is model law, if he understands its principles, then why did these principles come? What is the purpose of this model law? Do you know the purpose? What is the purpose of model law? To bring it at par. International practices are being brought to the Ad Parliant In purpose, in that purpose Cooperation Then, legal certainty For trade Environment for trade and environment cut For trade, write investment Write investment Legal certainty for trade investment Brother, if unicetral Model law is adopted Then will the foreign investment come in that country? They will say that even if it happens in our country, it is acceptable there. We will invest there. How will the FDI in India grow when India adopts the unicetal? So, the purpose is to give cooperation, to increase trade investment. Then, what is given? Fair and efficient administration of CBI. Then, maximization of value. That will be there. and rescue of financially troubled businesses write after that protecting write after troubled businesses protecting investment and preserving employment rescue of financially troubled businesses how will it be? how will it be? protecting investment and preserving employment The financially troubled businesses, friends understand this meaning, we will study further in this. What is the institutional model law? Listen carefully. The company is in insolvency state. In which state? Insolvency. Not liquidation. The company which is in insolvency state, don't handle that company, don't stop that company's business, give that company some freedom, give it some freedom. If you have made a mistake, give him a chance to correct it. So that the company doesn't get shut down. Then the company's business will run. And the dependent employees of the company will also get bread and butter. So the rescue, the financially troubled businesses, protecting. Because there is an investment to start that company. So if the company remains, will investment be protected? Say it. Cooperation, trade investment, administration of cross border insolvency, maximization of value of assets, protecting financially troubled businesses and generating employment. Maintain it. Scope, model law. What is the scope? Read this scope. I have already told you the scope indirectly. When the model law is foreign proceedings, recognition, direct access to foreign practitioners, then what is given in the scope? Tell me. Look, I will examine it. Brother, in foreign state and Indian state, when I talk about India, domestic or foreign, both the creators, both the practitioners, both of them, each other's... In areas, in territories of each other, to practice and file the insolvency proceedings, will you give access? See, assistance is sought in this state by a foreign court or representative in respect of foreign proceedings. And assistance is sought in a foreign state in respect of proceedings in this state. And forget it. Understand? There, read the conclusion loudly, what did everyone write? In case of conflict between model law and the obligation of the state enacting the model law out of any treaty the treaty or agreement shall prevail model law mein or do states many can I foreign state domestic state un dono state ki beech mein koi treaty hua model law ke taith model law ko base karke treaty kia na to treaty or model law mein kya prevail hoga treaty prevail hoga Are you understanding or not? Who is the treaty? The agreement that has been made in domestic and foreign states That agreement has importance, isn't it? Model law is general for every state Now there, just write above there The scope of application or the unicidal model law Unicidal model law is there, application is there. it does not apply to dash and dash will anyone say this? which category of enterprises is not applicable to this model law? so write it does not apply to banks and insurance companies model law it does not apply to banks and insurance companies keep in mind why? our IBC is also not applicable to them IBC is also applicable because Unicetral is also not applicable because they have specific provisions This Unicetral that we are seeing is for general corporate bodies Like we say the companies are applicable where banking, insurance Act is silent, you have applied the Cambridge Act there? Say it. It is in the same way. I give you one minute. First look at the model law. Cross border interstitial model law. I have divided it into proper points. Meaning, principles, purpose, scope, conclusion. Hi everyone If you understand, say yes or no Sure? Then tell me What is the difference between Unicetral Model Law and Unicetral Legislative Guide? What is Model Law? It is text. Model Law, Legislative is text. And Unicetral Legislative Guide is only a guidance to make you law in your country. The guidance you can adopt. This is guidance and text means adopt it as it is. Understand or not? So the question given further What is the question? Mention the key provisions of UNCITRAL Legislative Guide on Insolvency Law Say it So with me What I have already said You can only Legislative Guide on Insolvency Law was prepared by UN UNCITRAL You write further From a proposal received in 1999 And then you will get to know the scope of the legislative guide. I am doing it online. Used as a reference. I am giving a break. By national authorities and legislative bodies. While preparing new laws. Or reviewing the advocacy of existing laws. regulations discusses issues central to the design of an effective efficiency insolvency law discusses the importance of tools for addressing insolvency restriction negotiations enter between data and with a link not key creators key key creators which are not again which are not cut grow regulated by insolvency law Key creators which are not regulated by Insolvency law What does this mean? Where among the creators, the important creators insolvency law is not applicable there too, these tools can be used Restructuring, negotiations for insolvency. So, legislative guide is used as a reference. It helps in discussing central issues for the efficient and effective insolvency law. Discuss the importance of tools where insolvency is not applicable. It will be used there also. Tell me brother, what does it mean? Where regulated by insolvency law, which are not regulated by insolvency law? Banks and financial institutions? Banks and financial insurance companies? They are not regulated? So, can we use these tools in their case too? Is this what he is saying? Okay, read the purpose. Again the same. Establishment of effective and efficient legal framework. Assist in law reforms. Achieving balance between the needs. To address data's financial difficulty and I will write stakeholders directly Balance between the data and the stakeholder Brother, it is a win-win model Keep the corporate data as much as the stakeholder Keep the corporate data as much as the stakeholder And evaluate the different approaches and solutions available This There are four purposes of legislative guide. Again, this second example, legislative. To understand this in the beginning, I don't know if you have read this in your home, if you have seen this in detail or not. Legislative guide, legislative text. Legislative text, model law. Non-legislative text, rules. And guide is used as a reference. Clear? So, how many areas is this guide given? Next, see here. This guide is given in four areas. Now, this is used for reference, right? So, where is the first guide used? To set the objectives of insolvency law. This guide will be used. Then, number two. Guide will be used for the core features of insolvency law. Treatment of enterprise groups in insolvency, both national and international. Enterprise groups means related parties. Say brother. Is everyone here? How will they be treated? And then, obligations that might be imposed upon those responsible with respect to making decisions Making decisions with respect to the management of an enterprise facing imminent insolvency or insolvency becomes unavoidable What did you say? Obligations that might be imposed upon those responsible for making decisions Who is responsible for making decisions? Management, board, obligations, what are their duties? That might be imposed upon those responsible for making decisions. Is there a guide for that too? So, how does the UN's legislative guide work as a reference for insolvency law? So, to set the objectives of insolvency law? Read those two points, what are the objectives of insolvency law? Read the objectives of insolvency law. And if you compare it with IBC court 2016, you will know that yes, here also we have comparison of insolvency law and other laws. Presidency town insolvency act, insolvency act, which came separately, then we say companies act, partnership act, the laws of insolvency in them also, why all of them? You brought common code with relationship right? Say it Then types of mechanisms available for resolving a data's financial difficulty We make resolution strategies and resolution plans Will it come in objectives? Then Then core features of various stages of an insolvency proceeding from their commencement to the discharge of a data and closure of proceedings. So I say commencement, discharge and closure. Where will these core features work for all three stages? This guide commencement of insolvency proceedings, discharge of the data and closure of the proceedings in all three areas is helpful, isn't it? Okay, third part that I had said, that enterprise groups, can you tell me the meaning of it? You have already said it. Group enterprises. In that, what is given? Domestic level and international level. What is given in domestic level also? to streamline insurgency proceedings involving Two or more members of same enterprise group and in international level Cooperation and coordination Mechanisms to address enterprise groups insolvency in the national context Hey, tell me Is everyone here? Last, what is in obligations? To protect the legitimate interest of the creators and stakeholders. So I will say protect the interest of stakeholders. And if it is stakeholders, then who will be here? Enterprise. We are talking about balance. What is the purpose of balance? Balance will come in this. Obligations management has to give that you think about stakeholders. And think about enterprise. These are the key provisions of legislative guide. Key provisions of legislative guide are its purpose, scope and meaning. I hope you can understand it. Tomorrow, we have the distinction between unicentral model law and unicentral legislative guide. You should write it. How to write it? By printing the model law. By writing the legislative guide. And by giving the conclusion that both are different. Students write difference in exams You are professional students Don't do that foolishness The difference is there when they ask for the value It means they want from you both And then below that You look at the conclusion and tell them Give a summary that This is here, this is here, this is different, these are not the same Difference doesn't mean that they want actual difference If it is different then it will be a difference Clear? Yes. What is given below? What is given? How are bankruptcy cases dealt in US? Mention the six types of bankruptcy cases provided in the US Bankruptcy Court. Chapter 14, which is our first book, write it on page 4. Our notes are on page 4. Come to page 4 of your marathon notes. If you have come, then read it there. Then on page 74, you will come again. On page number 4, the US Bankruptcy Court is given. You have to read it. You have to read it. You have to read it. You have to read it. You have to read it. You have to read it. You have to read it. You have to read it. You have to read it. Hey, how are you all? When we discuss the US Bankruptcy Code, how did the United States of America originate the Bankruptcy Law? I am telling you that, first of all, in the United Nations, in Bankruptcy Laws, laws bankruptcy laws involved imprisonment until doubts were paid there in the US when the law was made for the first time so till the time who has defaulted till the time he doesn't give money he used to live in jail or till the time the creators agree to release him till then he used to live in jail say it bro, there was no uniform law every state had its own law so And whenever there was an economic recession, there was a temporary statute. Recession is over, statute is over. But in 1898, National Bankruptcy Act was introduced. to provide for rehabilitation of a dator as an alternative to liquidation of assets. Rehabilitation. Where is Sanmukti? Rehabilitation centers. In India, the rehabilitation centers centers of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the for rehabilitation of data as an alternative to liquidation of assets. Instead of liquidating it, rebuild it. Rebuild it again. Just like how the government has rehabilitated public sector banks. Public sector, PSU banks are public sector entity kings. They are running for rehabilitation by the government. Already there was a merger. Yes or no? Now, Air India is running. BA Ceylon is running. What is that rehabilitation? So, in the United States, to provide for rehabilitation of daters, National Bankruptcy Act. And then, in 1978, Bankruptcy Reforms Act came. The one who established bankruptcy courts in each district and made provisions for appointment of separate bankruptcy judges The bankruptcy act of 1978 has six categories Now see, it is very interesting in that, they have given one Liquidation, what did they say? So who will be liquidated? Say it In liquidation, Court appointed, trusted, administrated, took possession of non exempted assets So, this is about the company Then second, about the municipality Then third, I will say About the reorganization plan Fourth, about the family, farmer and fisherman Fifth, about the individual Sixth, Datas, Claimants and other interested parties involving more than one country. I mean, about cross-border. The data, claimants and other interested parties are in one or more countries. Yes, the cross border that we are reading is here. Yes, but the US Bankruptcy Reforms Act of 1978, in how many areas did it bring bankruptcy code? Six areas. First, a court appointed trustee or administrator took possession. Second, the municipal corporations were also given protection. A confirmed payment plan is given. Reorganization is given. Meaning, business operations are not stopped. They are told to continue reorganization. Data remains in control of the business operations. And pays creditors through a court approved reorganization plan. What do you think? Most of the companies, will they go for liquidation or reorganization? Reorganization. Because in that, the company remains in place and at the same time they get time Many times, you see in India, the banks they reschedule a company and give time to pay the debt What is that? It is nothing but reorganization, restructuring Isn't it, people? Those are six areas So write here, like page 4, refer page 70. Like the reference given, in that reference, you will come to that reference. Then, what is the purpose of discussing the six laws that we have seen? What is given on the next page? The heading. So, which chapter is this re-organization? I mean, the six laws of US, was there a chapter two re-organization? Yes. So, that point, look at page number four. No, no, no, no. What I am saying On page number 4, the chapter 11 Reorganization, they gave detailed explanation about that. Who said reorganization? It's chapter 11. Just make it chapter 11. And they gave the silent features of chapter 11. How is reorganization done? What happens in reorganization? Company is not declared insolvent. Companies don't file to liquidate. Management remains in control of the business. Business operations are not interpreted. However, automatic stay prevents parties from taking legal action. You get relief, right? Remember? Relief. Then, most public companies prefer to file under chapter 11 because they can still run their business and control bankruptcy process. Tell me, brother. So, read the conclusion loudly. Thus, under reorganization, a company successfully works out a plan to return to profitability, keeps doing businesses, its stocks and bonds, continue trading market instead of liquidation. Is everyone here? Okay. We have discussed the objectives of cross border insurgency, the meaning and purpose of unicultural model law, its scope, the meaning and purpose of unicultural legislative guide, and now U.S. Bankruptcy Code we saw reorganization in that. We saw United Nations Model Law how many principles of that model law we saw? Access Recognition, Coordination and Cooperation and Relief. Coordination and Cooperation are one and the same. We are treated. So these principles in these principles the relief principle the relief principle that principle Q is important, you will know on the next page in article 21, where is that model law given? what is the heading? under the incitral model law what are the reliefs that may be granted upon recognition of a foreign process under article 21, wait a minute, read the question don't make a mess for the answer, what are the reliefs that may be granted upon recognition of a foreign process one is application and other is recognition What does recognition mean? What relief will you get after giving recognition? One is what relief will you get after giving application? One is what relief will you get after giving recognition? What relief do you get after giving recognition? So in relief, those points, just make it number one. I have already given, there are seven points there. Tell me, what is the first point? Staying the action. So in that, what should you do? Staying actions. In second, staying executions. Then, suspending the Right to transfer any asset. He can't sell assets, right? Say brother. Then, examination of witnesses. and say administration of all assets custody of all assets will be taken care of act as a manager, receiver of the property then relief granted under extending relief granted under 2 and 5 above 2 and 5 above then granting any additional relief to any person or administrator and read the note below, tell me the meaning of note quickly what does note mean? The foreign court in which the proceedings are taking place will be called as foreign main proceeding But the foreign country or area where the corporate debtor has a business unit or establishment or asset then that is foreign non proceeding The proceedings are not taking place there, it is his asset What is given? A foreign proceeding shall be recognized as foreign main proceeding if it is taking place in the state where the data has the center of its main interest. Or as a foreign non proceeding main proceeding if the data has an establishment within the foreign state. Tell me brother. This is the word center of men interest. It's for relief. Relief. The one we wrote, model law. What was it? Cooperation and coordination was there in model law. In principles. Cooperation and coordination. Cooperation and coordination. What was written in coordination? What was written in coordination? Tell me. between two or more concrete insolvency proceedings in different countries based on the concept of based on the concept of center of main interest based on the concept of Center of main interest. You don't understand what is center of main interest. Who will tell what is center of main interest? What is center of main interest? Foreign proceeding which is happening in foreign country if foreign proceeding is happening in foreign country then it is a central main interest but in that foreign country your establishment is establishment is it is foreign, non-main proceeding your establishment is there that is why it is happening there your business establishment is there that is why it is happening there ok, I will give you an example Infosys But now whistleblower from US has put an allegation Whistleblower from US has put an allegation that their balance sheet is S collected Where has it been put? In US Now here SEBI has started the action In India SEBI has started the action But Infosys establishment is here I have established it. Do you understand? So this will be non-proceeding. Main is in US. Hey, tell me brother. Do you understand? Then, chapter is just about to get, there is one second last concept. What is that? Cross border insolvency provisions in. In IBC Code 2016, you just have to cut from point number 1, it is 234, 235, 234, 235. Below that, Just change the sequence. It is 1, 2, 3 and 4. And the point number 1 and 2, the sequence has changed now. Write 1 or 2. For 1, write 234, 1. For 2, write 234, sub clause 2. Then for point number 3, write 235, sub clause 1. Now for clicker 235 sub clause 2 So this cross border insurancy in IBC, those two sections, those two sections are given there? Tell me. Page number 73 is given there? What did I say? The first point is heading. Section 234 and 235. Those four provisions are given under that heading. First two provisions are that 234 sub clause 1 and 234 sub clause 2 and next next two 235 sub clause 1 235 sub clause 2 first two provisions read what is it? we have already discussed just give me a reference read the headings CG agreement with which we called reciprocal arrangement we said it right? What does it mean? This application, again, the court proceedings of that country will be applicable here, the proceedings here will be applicable there. How will the arrangement be done? Read it loudly in the centre. The CG may enter into agreement with the government of any country outside India. for enforcing the provisions of this code? Our, like we say, money laundering act. In other countries, there is a recipe arrangement. Similarly, in IBC, in some foreign country, asset, what to do? To liquidate, to realize, to cross, cross border insurance, will they take the asset in custody? To sell the asset, to realise the asset, will they have to take the asset in custody? Number one. What is number two? In CG, by notification, the official has said direct that the application of provisions of this code in relation to assets or property of creator or data situated in a country outside India with reciprocal arrangements have been made. What does it mean? Tell me. In relation to assets or property of the creator or dator means first there is an agreement with the foreign government first there is an agreement and second under the provisions of this code, under that agreement those assets of the property of creator or dator are applicable means because of point no.1 point no.2 is applicable When there is an agreement in point no.1, then in point no.2, you can bring the assets in another country with the help of reciprocal arrangement. Got it? What is 235? Say it. Resolution Professional Application 2. What does AA mean? Adjudicating Authority. Read it. Any evidence or action relating to assets of creator or dator are situated in such country and from that country, give an arrow and write, situated in country outside India. Situated in country outside India. Write with an arrow below that, with whom? It is written, with whom reciprocal arrangements have been made. Under that single out and write, evidence or action. In relation to such assets, evidence or action in relation to such assets is required in connection with such process or proceeding. Oh oh oh Tell me In 234 sub clause 1, our government has made an agreement with that government In 234 sub clause 2, our government has notified which assets of the creator and editor which has not been included in the reciprocal arrangement In 235 After the government's notification, the resolution professional has applied to the adjudicating authority in that country and said Sorry, he has applied to our adjudicating authority and said that the asset in that other country, we need it under the proceedings And then it is given in 235 sub clause 2 After their application, the adjudicating authority may issue a letter of rec... Request to the court or an authority of such country competent to deal with such request See the sequence Again because this is the cross border insolvency of IBC court So you can expect question on this because I am in the unit settle matter First tell me if you know the house provisions Earlier, I told you about the 234 and 235. In the sequence, I told you about the 234. Our government will make an agreement with that government. And under that agreement, under that reciprocal agreement, our government will notify the official government, assets of the data creator which we can recover by the procedure. Then in point number 3, in 235 sub clause, the resolution professional will ask our ad duty authority to take action on that asset which is being used by the other state. foreign statement situated outside the country talk you say who insolence approaches kill a flow for whose car request application on a key part would your add Judy authority who let off request Dega who's this key wahake authorities co or whose k basis for or asset fractionally a jagger a letter of request to a court or authority of such country competent will be such request from your crossword insolence each our steps char points and then on the first page number 67 I'm just they go what World Bank principles. World Bank principles. 67. Did you get it? World Bank principles. If you see in that second point. Standards for effective insolvency. And creditor right systems as follows. Creditor right system. We saw in cross border insolvency. Efficient and effective insolvency law. and here you can see standards for effective insolvency and creditor rights system as follows today if you see your credit history, civil report civil report is there It is not only 20 years ago, but 15-20 years ago. It has become a principle in the last 10-12 years. Why? It is the principle of the World Bank. The World Bank has said that in your country, you can get the credit environment, credit history of every person. There should be such a platform. So the principles of the World Bank, the standard of... See, when there will be a credit history, a credit environment, then before giving loans to any borrower, before giving advance, you can easily judge his background, which will help you in taking a decision. Prevention is better than cure, right? So the World Bank says, bring such principles, that you give money to such people who don't default. Tell me, that's why it is given in the principles of the World Bank. They have given four points. First, Credit Environment. Then second, Insolency Law System. Third, Implementation, that is Institutional Regulatory Framework. And fourth, Recompre... and see overarching considerations of sound investment climates. I request you all, please read the first point. Credit environment. What I said, credit history. Read it. How did you give it there? Because it's very vast. I can say, we can do one thing there. First, there are two points in that. First two points. Write that. First two points. Compatible. Common. Compatible credit. Compatible credit and enforcement systems. Third we write enforcement mechanism. Enforcement mechanism. Fourth me apliko. Credit information systems. Credit information systems. Credit information, means the history of the borrower Credit information system, which I had given you in the civil report In point no. 5, it says, informal corporate working out Informal corporate working out, Indians are very expert in this Informal corporate working out, point no. 5 Indians are very expert in this Why did you give it? Read it What is informal? This is negotiation. Take it and settle it. That corporate house, after that, in an informal way, by going to that bank or financial institution, by going to that financial credit, by doing negotiation in an informal way, will it settle? They settle it, but their credit environment gets disturbed. What is that? Informal corporate working out to restore an enterprise to financial viability. In that, rescheduling, restructuring, neutral tax, treatment, out of court settlement. All these are examples. This is coming in credit environment. What is the second? Insolvency law system. In that, you have to add effective insolvency law. World Bank says, how should it be in every country? Effective insolvency law should be there. Which integrates the broader legal compliance system of that country in maximizing value of firms assets and recovery by creators. and the laws of the country combined together to bring effective insolvency law oh oh oh world bank didn't say in 2001 and we came in 2016 so we said we brought IBC code so that there was a lot of problem We didn't bring it ourselves. When World Bank laid down these principles to every country, we thought we should also do it. We haven't set any pioneer concept or benchmark. We brought it from Effective Insolvency Law on the words of World Bank. And then number 3, what did they say? Implementation that is institutional and regulatory framework. What is there in that? For this insolvency law, there should be a regulator. Regulator. Like here is IBBI. Insolvency Bankruptcy Board of India. So what is there? The Institutional Responsible for Insolvency Proceedings. The Operational System to Preserve the Integrity. So here in Institutional Responsible for Insolvency Proceedings, I will say Insolvency Bankruptcy Board of India. I will also say Information Utility in the second point. To recognize. that integrity of insolvency is core for a successful implementation. Our adjudicating authorities, information utility, insolvency professional, insolvency professional agencies when we have set up all these, for the implementation of that institutional framework, the example I gave, if you link it, it will be very easy. So I am discussing credit environment, effective insolvency law and the last one is comprehensive, over-arcing, what is over-arcing? including everything, comprehensive means over-arcing which includes all considerations of sound investment climate, like a good investment destination like climate, there should be insolvency law in that country In this case, how is the law of insolvency? It should be transparent, accountability, predictability is essential. If transparency, accountability, predictability is a tab, then in that case we will say, okay, what is that? Comprehensive, look what is there, to develop communication and cooperation and to have a strong lending system and corporate sector and for predictable risk allocation rules and consistent laws. Please see here, comprehensive overarching considerations which we have discussed. Comprehensive, overarching considerations, to develop communication and cooperation and to have a strong lending system. Sound investment climate is there, so will there be strong lending systems? Strong lending system and corporate sector and for predictable risk allocation rules and consistent laws Ye ek achche Insolvency bankruptcy code or ek achche insolvency law ki nisha nahi Finally cross-border insolvency is over You see

But this cross border insolvency is important in itself because as globalization is increasing, It is very easy to do business across the globe. Companies have many vendors across the globe. There are customers. And we say that globalization is a very big reason to increase the importance of cross border insurance.

Why did they have to bring cross border insolvency? Why did they have to bring the majors and legislation of cross border insolvency? Because the national insolvency law of every country is different from the national law of any other country National insolvency law will match, it is not necessary. There will be some ambiguity, there will be some confusion.

So, this ambiguity and confusion will not remain. That is why, United Nations, first of all I will say UNGA, United Nations General Assembly, about cross border insolvency they announced a legislative text in 1966 in 1966 they announced a legislative text they told every member country that the guidelines we are giving the legislations we are giving they should be kept in mind What should I do with the law of insolvency of your country? Frame it.

Make it. So that was a legislative guide. That was a legislative guide text for framing the law of insolvency.

But later the UN thought that the guidelines we are giving those guidelines are being adopted by every member according to their convenience. The legislative text, the legislative guideline. So the UN has adopted a model law. What is it called?

United Nations International Commission Commission on Trade and Law. They announced a model law called Unicetral model law on insolvency bankruptcy which we have announced about cross border insolvency. Our Insolency Bankruptcy Committee in 2018, just last year, Insolency Bankruptcy Committee, they have given a recommendation to the government to adopt this model law. Till now, the IBC code which was in 2016, in that, somewhere, this model law of UNICETL, till now, 100% follow was not happening.

Just last year, the government was recommended that the IBC Code 2016 should adopt the whole unicentral model law. So I will say, this chapter, first of all we have to do cross border The doctor has to study in three parts. One is the part of the UNICITRAL.

What is UNICITRAL? United Nations Commission on International Trade and Law. He has to study from their point of view.

Then he has to study the development of the World Bank legislative development and cross border insolvency. and a US Bankruptcy Code The US Bankruptcy Code is in our notes on the page number 4 of Marathon it is also given in chapter number 1 US Bankruptcy Code It is given here, one stop point, here are some points which we will discuss The historical evolution of Indian Insolvency Code there is also reference of US Bankruptcy Code When I say Unicetral then there you see below after these three points in Unicetral they have given Unicetral Key Objective of effective and efficient insolvency law and legislative guide on insolvency law and model law on cross border insolvency. Now you understand, there is one legislative guide and one model law..

What is the main objective of UNICITRAL? Effective and efficient insolvency law. UN has different units.

Like there are different departments in the company. By the way, UNGA has a separate unit, a separate part, UNICITRAL. UNICITRAL. The main objective is to bring worldwide efficient and effective insolvency law. And with this, they have also brought legislative guide, which has been updated from time to time and also introduced model law.

Everyone is there, right? Then down there, In our existing IBC Code 2016, section 234 and 235 are about cross border insolvency. That too is given in this chapter.

And what I said about the Insolvency Law Committee on Cross Border Insolvency recommendations. Write it down. Everyone, write it down.

On 16th October 2018, write it down. On 16th October 2018, the ILC on 16th October 2018, the ILC recommended adoption of recommended adoption of Unicetral model law of CBI Unicetral model law of CBI CBI means Cross Border Insurgency What you think is CBI is not CBI Unicetral model law of CBI Cross-Border Insolvency And pay attention, this has just been recommended in 2018 And in June 2019, you see the question on model law in the exam In June 2019 exam, this question is asked Insolency Law Committee's recommendation was on 18 October 2018 In June 2019, they have asked questions on Model Law in the exam. Anyways, but you should have understood from that particular hint.

When we read, we get an idea. But we have to read this in this chapter. Then I will say, A P No. 60 Come to chapter 8 first. In this chapter, the first part we have to read is what is called cross border insolvency and what are the key objectives of cross border insolvency.

who is called cross border insolvency? we have seen it just now that point is given there insolvency is a financial distressed debtor means corporate debtor what is the financial position of that corporate debtor? he is very distressed he has a lot of burdens he has assets or creditors in more than one country or jurisdiction he is called cross border insolvency what is the other name of that?

international insolvency but objectives of efficient and effective insolvency regime are as follows. This is also a question asked in the exam. What are the objectives of cross border insolvency? So those objectives, in the form of an acronym, we say met fret.

I have made it like this, met fret. One. Rhythmic word is made by this, METFET METFET, M stands for Maximization of Value Is everyone there? E stands for Equitable Treatment, Treatment of Creators, Equitable Treatment T stands for Timely and Impartial Resolution of Insolvency Is this met?

Is everyone there? Then Again, equitable distribution to creditors. Equitable distribution to creditors.

Then, transparent and predictable insolvency law. Is this the E.T. of FRED?

Say it. then g.2 is a part of f only recognition of existing creators rights and and establishing rules of ranking of priority claims that is recognition recognition of existing creator rights and priority claims i below and ff framework framework framework for cross-border insolvency So in this, in MET, first it was ABC, in FRET, the framework is... Is everyone here? SS-7, what is it?

Key objectives of an efficient and effective cross-border insurgency point. If we see that these objectives are more or less... Are they also in IBC?

If any... Insolvency professional when he will make a resolution plan for a company when he makes a resolution plan for that company the liquidator liquidator also goes for liquidation this is company's insolvency professional who are market participants who help to make a resolution plan Keep in mind that maximum value of assets is there So, the company which is going into insolvency then why not cross border Objective will definitely be maximization of value of assets Creditors should have equitable treatment Equitable distribution between the creditors Timely and impartial resolution of insolvency Transparent and predictable insolvency law Recognition of existing creditors rights and priority claims, framework, establishment of framework of cross border insolvency, we can say establishment of proper framework of IBC. The objective is the same like objective we discussed in IBC also. and say brother but the question is what is cross border insolvency what are the objectives for efficient and effective cross border insolvency then below that you see this point UN Central Model Law on CBI That is cross border transparency.

What I had said was they give a guide and one is text. The guide is used in a different area and text in a different area. What they have said is unicital.

I want you to write the meaning first. Write it up there. Now write UNGA write it there.

UNGA dash Uncitral, Uncitral, Uncitral, bracket become 1966, dash, prepares international legislative text, prepares international legislative text. and non-legislative texts International legislative text and non-legislative texts So, for use by common parties for use by common parties in negotiating In negotiating transactions, were used by common parties, In negotiating transactions, two minutes, Unline legislative text. How will you unline?

Legislative text. Then unline non-legislative text. The non-legislative text is the best example.

Whatever is non-legislative, text hai uske upar se arbitration and consolation act jo hai India mein frame hai na arbitration and consolation act ye non-legislative text ke tar se adopt hua hai aur jo legislative text hai uske taith hum insolency bankruptcy code dekhte hai to legislative text matlab kya hai jisko lekar aap law banaoge wo text jisko lekar law banaoge aur non-legislative text matlab jisko lekar aap rules banaoge Look, whatever I say, you will understand. The legislative text, means the text on which you will make legislation, law. Yes, international commercial arbitration, you have to make law on that, legislative text.

But arbitration and consultation have rules. Rules, proceedings, they have to be decided. Non-legislative text. That text will be used only for the rules.

Non-legislative, right? So this is how it is made. Unicetral is a legislative text or non-legislative text.

It is recommended by both. It is recommended by both by preparing. People adopt that. Now this unicetral model law, again it is a legislative text. Because we are talking about adopting unicetral model law in our IBCM.

So what is unicetral model law? It is a legislative text prepared by the unicetral which is a body of UNGA. I am repeating UNCITRAL MODEL LAW is a legislative text prepared by UNCITRAL which is a body of UNGA UNGA has a small part say it Like under central government comes state government or under central government comes parliament.

After parliament we can say that parliament is Lok Sabha Vidhan Sabha. And we say, is this the president's accent? Similarly he says, United Nations.

We see United Nations Environment Programme United Nations UNEP Environment Programme That organisation That environment We will be doing global warming This UN CITRAL We will be doing international trade and law UN body UN body That body is making legislative text That is making model law And by making model law, every member of the country is asking to adopt this model law First you have to understand that. Everyone is there, right? Then what should you read? Model law is a legislative text recommended to the states for enactment as a part of national law with or without modification. Now it will seem easy.

Say brother, this text of UN Central, every state, state means who? The members. To adopt them. Model laws are comprehensive set of legislative solutions to address a particular topic and direct incorporation of provisions or...

of model law. Direct the incorporation of provisions of model law. So what is the UN CITRAL model law? It is a legislative text which the UN CITRAL has asked every state and member to adopt for their national law. Now these model laws have some principles that are adopted in these principles are adopted in 44 countries.

As on date, 44 countries have adopted their law insolence. to make a model law? Say it. There are enough member countries of the UN. But how many countries have adopted the principles of model law from the member countries of the UN till today?

44 countries. What are the principles of model law? One is access.

One is recognition. Second is cooperation and co-ordination together. And I request you all to add one more there.

Relief Cooperation condition quick south low and relief and grow now The access get the access people apply except to direct access What can you write? Direct access, then recognition, then cooperation and coordination, then relief. When I see this, the first point is access.

Access means what? Direct access to foreign insolvency, just cut that proceedings, it is professionals. Foreign insolvency professionals and creditors to participate or commence domestic insolvency proceedings against the debtor. Oh oh oh Model law says Those foreign insolvency professionals And those foreign creditors They should give direct access to participate in domestic insolvency proceedings against the debtor in your country.

Model law is being introduced. Model law says that even if the external creator is not there, the external professional can participate in it. Today, we can appoint an external person as an internal resolution professional.

If the external creditor is an Indian company, can the external creditor apply for the Indian company for insolvency? So they say, give direct access to the foreign insolvency professionals and creators to participate or commence domestic insolvency proceedings against the data. I hope it is clear.

Give them access. Along with giving access, give them recognition. Give recognition to whom? Listen.

Give recognition to foreign proceedings. In their country, the procedures, foreign proceedings and provisions of remedies. Write below. Example.

Example, orders issued by foreign courts. What will you write? Orders issued by... Tell me, what does foreign courts mean? If an order has been issued against an Indian company in a foreign court, then that particular order has been enforced by the authorities of the Insolvency Bankruptcy Court in India, right?

Only then it will be recognized, right? When they have been given recognition, it means that their orders are valid here. Give direct access to foreign professionals and foreign creditors.

Give recognition to foreign orders. Then, show cooperation and coordination. How much cooperation? Between domestic and foreign courts and insolvency practitioners. One will say, I will do it right, you will come, Supant.

Will you help each other? and that is why we will move ahead with marathon listen carefully between domestic and foreign courts and insolency practitioners and then coordination between two or more concurrent insolency proceedings in different countries concurrent means same time when at the same time two different countries are having insolency proceedings Proper coordinate karo, dono ke jo orders hongi hai, wo ek duje ke saath mil kar discuss kar ke pass karo. Hey, say it. Keep in mind, the principles of Model Law, how many countries have adopted these principles?

44. They say, we will give direct access. We will give recognition to your foreign court orders. We will do coordination and cooperation. And then relief, you write relief there, everyone. Below relief.

It is a basic principle. It is a basic principle. Necessary. For the orderly and fair conduct, basic principle necessary for the orderly and fair conduct of CBI. orderly and fair conduct of CBI what does it mean?

orderly means in a structured way fair means equal justice principle of justice fair conduct of CBI write that in the next line that is automatic stay you write automatic stay upon recognition of main proceedings Automatic stay upon recognition of main proceedings. What does it mean? Automatic stay upon recognition of main proceedings.

Relief, isn't it? Relief. So relief says that any company against which CBI, cross border insurancy, the proceedings have started, all the proceedings against them in the court, they will get automatic stay. We are seeing the same thing.

See, no further petition can be filed against that company without the permission of the tribunal. They present it in different ways to give relief. How to give relief?

If you want to make that cross border insolvency smoothly, effectively and fairly conducted, then all the main proceedings against them, they have to be brought to an automatic stay. Is everyone here? This is a little bit... After a break, after eating, when we discuss, he understands better.

Everyone is here, right? Sure? So, once understand these principles, tell me.

If he understands what is model law, if he understands its principles, then why did these principles come? What is the purpose of this model law? Do you know the purpose? What is the purpose of model law?

To bring it at par. International practices are being brought to the Ad Parliant In purpose, in that purpose Cooperation Then, legal certainty For trade Environment for trade and environment cut For trade, write investment Write investment Legal certainty for trade investment Brother, if unicetral Model law is adopted Then will the foreign investment come in that country? They will say that even if it happens in our country, it is acceptable there.

We will invest there. How will the FDI in India grow when India adopts the unicetal? So, the purpose is to give cooperation, to increase trade investment. Then, what is given? Fair and efficient administration of CBI.

Then, maximization of value. That will be there. and rescue of financially troubled businesses write after that protecting write after troubled businesses protecting investment and preserving employment rescue of financially troubled businesses how will it be? how will it be?

protecting investment and preserving employment The financially troubled businesses, friends understand this meaning, we will study further in this. What is the institutional model law? Listen carefully. The company is in insolvency state.

In which state? Insolvency. Not liquidation. The company which is in insolvency state, don't handle that company, don't stop that company's business, give that company some freedom, give it some freedom.

If you have made a mistake, give him a chance to correct it. So that the company doesn't get shut down. Then the company's business will run.

And the dependent employees of the company will also get bread and butter. So the rescue, the financially troubled businesses, protecting. Because there is an investment to start that company.

So if the company remains, will investment be protected? Say it. Cooperation, trade investment, administration of cross border insolvency, maximization of value of assets, protecting financially troubled businesses and generating employment. Maintain it.

Scope, model law. What is the scope? Read this scope. I have already told you the scope indirectly. When the model law is foreign proceedings, recognition, direct access to foreign practitioners, then what is given in the scope?

Tell me. Look, I will examine it. Brother, in foreign state and Indian state, when I talk about India, domestic or foreign, both the creators, both the practitioners, both of them, each other's... In areas, in territories of each other, to practice and file the insolvency proceedings, will you give access? See, assistance is sought in this state by a foreign court or representative in respect of foreign proceedings.

And assistance is sought in a foreign state in respect of proceedings in this state. And forget it. Understand?

There, read the conclusion loudly, what did everyone write? In case of conflict between model law and the obligation of the state enacting the model law out of any treaty the treaty or agreement shall prevail model law mein or do states many can I foreign state domestic state un dono state ki beech mein koi treaty hua model law ke taith model law ko base karke treaty kia na to treaty or model law mein kya prevail hoga treaty prevail hoga Are you understanding or not? Who is the treaty?

The agreement that has been made in domestic and foreign states That agreement has importance, isn't it? Model law is general for every state Now there, just write above there The scope of application or the unicidal model law Unicidal model law is there, application is there. it does not apply to dash and dash will anyone say this? which category of enterprises is not applicable to this model law? so write it does not apply to banks and insurance companies model law it does not apply to banks and insurance companies keep in mind why?

our IBC is also not applicable to them IBC is also applicable because Unicetral is also not applicable because they have specific provisions This Unicetral that we are seeing is for general corporate bodies Like we say the companies are applicable where banking, insurance Act is silent, you have applied the Cambridge Act there? Say it. It is in the same way. I give you one minute. First look at the model law.

Cross border interstitial model law. I have divided it into proper points. Meaning, principles, purpose, scope, conclusion. Hi everyone If you understand, say yes or no Sure? Then tell me What is the difference between Unicetral Model Law and Unicetral Legislative Guide?

What is Model Law? It is text. Model Law, Legislative is text.

And Unicetral Legislative Guide is only a guidance to make you law in your country. The guidance you can adopt. This is guidance and text means adopt it as it is. Understand or not? So the question given further What is the question?

Mention the key provisions of UNCITRAL Legislative Guide on Insolvency Law Say it So with me What I have already said You can only Legislative Guide on Insolvency Law was prepared by UN UNCITRAL You write further From a proposal received in 1999 And then you will get to know the scope of the legislative guide. I am doing it online. Used as a reference.

I am giving a break. By national authorities and legislative bodies. While preparing new laws.

Or reviewing the advocacy of existing laws. regulations discusses issues central to the design of an effective efficiency insolvency law discusses the importance of tools for addressing insolvency restriction negotiations enter between data and with a link not key creators key key creators which are not again which are not cut grow regulated by insolvency law Key creators which are not regulated by Insolvency law What does this mean? Where among the creators, the important creators insolvency law is not applicable there too, these tools can be used Restructuring, negotiations for insolvency.

So, legislative guide is used as a reference. It helps in discussing central issues for the efficient and effective insolvency law. Discuss the importance of tools where insolvency is not applicable. It will be used there also.

Tell me brother, what does it mean? Where regulated by insolvency law, which are not regulated by insolvency law? Banks and financial institutions? Banks and financial insurance companies?

They are not regulated? So, can we use these tools in their case too? Is this what he is saying? Okay, read the purpose. Again the same.

Establishment of effective and efficient legal framework. Assist in law reforms. Achieving balance between the needs. To address data's financial difficulty and I will write stakeholders directly Balance between the data and the stakeholder Brother, it is a win-win model Keep the corporate data as much as the stakeholder Keep the corporate data as much as the stakeholder And evaluate the different approaches and solutions available This There are four purposes of legislative guide.

Again, this second example, legislative. To understand this in the beginning, I don't know if you have read this in your home, if you have seen this in detail or not. Legislative guide, legislative text.

Legislative text, model law. Non-legislative text, rules. And guide is used as a reference.

Clear? So, how many areas is this guide given? Next, see here. This guide is given in four areas. Now, this is used for reference, right?

So, where is the first guide used? To set the objectives of insolvency law. This guide will be used.

Then, number two. Guide will be used for the core features of insolvency law. Treatment of enterprise groups in insolvency, both national and international.

Enterprise groups means related parties. Say brother. Is everyone here? How will they be treated? And then, obligations that might be imposed upon those responsible with respect to making decisions Making decisions with respect to the management of an enterprise facing imminent insolvency or insolvency becomes unavoidable What did you say?

Obligations that might be imposed upon those responsible for making decisions Who is responsible for making decisions? Management, board, obligations, what are their duties? That might be imposed upon those responsible for making decisions. Is there a guide for that too?

So, how does the UN's legislative guide work as a reference for insolvency law? So, to set the objectives of insolvency law? Read those two points, what are the objectives of insolvency law? Read the objectives of insolvency law. And if you compare it with IBC court 2016, you will know that yes, here also we have comparison of insolvency law and other laws.

Presidency town insolvency act, insolvency act, which came separately, then we say companies act, partnership act, the laws of insolvency in them also, why all of them? You brought common code with relationship right? Say it Then types of mechanisms available for resolving a data's financial difficulty We make resolution strategies and resolution plans Will it come in objectives?

Then Then core features of various stages of an insolvency proceeding from their commencement to the discharge of a data and closure of proceedings. So I say commencement, discharge and closure. Where will these core features work for all three stages?

This guide commencement of insolvency proceedings, discharge of the data and closure of the proceedings in all three areas is helpful, isn't it? Okay, third part that I had said, that enterprise groups, can you tell me the meaning of it? You have already said it. Group enterprises. In that, what is given?

Domestic level and international level. What is given in domestic level also? to streamline insurgency proceedings involving Two or more members of same enterprise group and in international level Cooperation and coordination Mechanisms to address enterprise groups insolvency in the national context Hey, tell me Is everyone here? Last, what is in obligations? To protect the legitimate interest of the creators and stakeholders.

So I will say protect the interest of stakeholders. And if it is stakeholders, then who will be here? Enterprise.

We are talking about balance. What is the purpose of balance? Balance will come in this.

Obligations management has to give that you think about stakeholders. And think about enterprise. These are the key provisions of legislative guide. Key provisions of legislative guide are its purpose, scope and meaning.

I hope you can understand it. Tomorrow, we have the distinction between unicentral model law and unicentral legislative guide. You should write it.

How to write it? By printing the model law. By writing the legislative guide.

And by giving the conclusion that both are different. Students write difference in exams You are professional students Don't do that foolishness The difference is there when they ask for the value It means they want from you both And then below that You look at the conclusion and tell them Give a summary that This is here, this is here, this is different, these are not the same Difference doesn't mean that they want actual difference If it is different then it will be a difference Clear? Yes.

What is given below? What is given? How are bankruptcy cases dealt in US?

Mention the six types of bankruptcy cases provided in the US Bankruptcy Court. Chapter 14, which is our first book, write it on page 4. Our notes are on page 4. Come to page 4 of your marathon notes. If you have come, then read it there. Then on page 74, you will come again.

On page number 4, the US Bankruptcy Court is given. You have to read it. You have to read it. You have to read it. You have to read it.

You have to read it. You have to read it. You have to read it.

You have to read it. You have to read it. Hey, how are you all? When we discuss the US Bankruptcy Code, how did the United States of America originate the Bankruptcy Law?

I am telling you that, first of all, in the United Nations, in Bankruptcy Laws, laws bankruptcy laws involved imprisonment until doubts were paid there in the US when the law was made for the first time so till the time who has defaulted till the time he doesn't give money he used to live in jail or till the time the creators agree to release him till then he used to live in jail say it bro, there was no uniform law every state had its own law so And whenever there was an economic recession, there was a temporary statute. Recession is over, statute is over. But in 1898, National Bankruptcy Act was introduced. to provide for rehabilitation of a dator as an alternative to liquidation of assets. Rehabilitation.

Where is Sanmukti? Rehabilitation centers. In India, the rehabilitation centers centers of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the center of the for rehabilitation of data as an alternative to liquidation of assets. Instead of liquidating it, rebuild it.

Rebuild it again. Just like how the government has rehabilitated public sector banks. Public sector, PSU banks are public sector entity kings.

They are running for rehabilitation by the government. Already there was a merger. Yes or no?

Now, Air India is running. BA Ceylon is running. What is that rehabilitation?

So, in the United States, to provide for rehabilitation of daters, National Bankruptcy Act. And then, in 1978, Bankruptcy Reforms Act came. The one who established bankruptcy courts in each district and made provisions for appointment of separate bankruptcy judges The bankruptcy act of 1978 has six categories Now see, it is very interesting in that, they have given one Liquidation, what did they say? So who will be liquidated? Say it In liquidation, Court appointed, trusted, administrated, took possession of non exempted assets So, this is about the company Then second, about the municipality Then third, I will say About the reorganization plan Fourth, about the family, farmer and fisherman Fifth, about the individual Sixth, Datas, Claimants and other interested parties involving more than one country.

I mean, about cross-border. The data, claimants and other interested parties are in one or more countries. Yes, the cross border that we are reading is here.

Yes, but the US Bankruptcy Reforms Act of 1978, in how many areas did it bring bankruptcy code? Six areas. First, a court appointed trustee or administrator took possession.

Second, the municipal corporations were also given protection. A confirmed payment plan is given. Reorganization is given. Meaning, business operations are not stopped. They are told to continue reorganization.

Data remains in control of the business operations. And pays creditors through a court approved reorganization plan. What do you think?

Most of the companies, will they go for liquidation or reorganization? Reorganization. Because in that, the company remains in place and at the same time they get time Many times, you see in India, the banks they reschedule a company and give time to pay the debt What is that? It is nothing but reorganization, restructuring Isn't it, people? Those are six areas So write here, like page 4, refer page 70. Like the reference given, in that reference, you will come to that reference.

Then, what is the purpose of discussing the six laws that we have seen? What is given on the next page? The heading.

So, which chapter is this re-organization? I mean, the six laws of US, was there a chapter two re-organization? Yes.

So, that point, look at page number four. No, no, no, no. What I am saying On page number 4, the chapter 11 Reorganization, they gave detailed explanation about that. Who said reorganization? It's chapter 11. Just make it chapter 11. And they gave the silent features of chapter 11. How is reorganization done?

What happens in reorganization? Company is not declared insolvent. Companies don't file to liquidate.

Management remains in control of the business. Business operations are not interpreted. However, automatic stay prevents parties from taking legal action.

You get relief, right? Remember? Relief. Then, most public companies prefer to file under chapter 11 because they can still run their business and control bankruptcy process. Tell me, brother.

So, read the conclusion loudly. Thus, under reorganization, a company successfully works out a plan to return to profitability, keeps doing businesses, its stocks and bonds, continue trading market instead of liquidation. Is everyone here?

Okay. We have discussed the objectives of cross border insurgency, the meaning and purpose of unicultural model law, its scope, the meaning and purpose of unicultural legislative guide, and now U.S. Bankruptcy Code we saw reorganization in that. We saw United Nations Model Law how many principles of that model law we saw? Access Recognition, Coordination and Cooperation and Relief.

Coordination and Cooperation are one and the same. We are treated. So these principles in these principles the relief principle the relief principle that principle Q is important, you will know on the next page in article 21, where is that model law given?

what is the heading? under the incitral model law what are the reliefs that may be granted upon recognition of a foreign process under article 21, wait a minute, read the question don't make a mess for the answer, what are the reliefs that may be granted upon recognition of a foreign process one is application and other is recognition What does recognition mean? What relief will you get after giving recognition? One is what relief will you get after giving application?

One is what relief will you get after giving recognition? What relief do you get after giving recognition? So in relief, those points, just make it number one. I have already given, there are seven points there.

Tell me, what is the first point? Staying the action. So in that, what should you do?

Staying actions. In second, staying executions. Then, suspending the Right to transfer any asset. He can't sell assets, right?

Say brother. Then, examination of witnesses. and say administration of all assets custody of all assets will be taken care of act as a manager, receiver of the property then relief granted under extending relief granted under 2 and 5 above 2 and 5 above then granting any additional relief to any person or administrator and read the note below, tell me the meaning of note quickly what does note mean? The foreign court in which the proceedings are taking place will be called as foreign main proceeding But the foreign country or area where the corporate debtor has a business unit or establishment or asset then that is foreign non proceeding The proceedings are not taking place there, it is his asset What is given?

A foreign proceeding shall be recognized as foreign main proceeding if it is taking place in the state where the data has the center of its main interest. Or as a foreign non proceeding main proceeding if the data has an establishment within the foreign state. Tell me brother. This is the word center of men interest. It's for relief.

Relief. The one we wrote, model law. What was it? Cooperation and coordination was there in model law. In principles.

Cooperation and coordination. Cooperation and coordination. What was written in coordination?

What was written in coordination? Tell me. between two or more concrete insolvency proceedings in different countries based on the concept of based on the concept of center of main interest based on the concept of Center of main interest. You don't understand what is center of main interest. Who will tell what is center of main interest? What is center of main interest?

Foreign proceeding which is happening in foreign country if foreign proceeding is happening in foreign country then it is a central main interest but in that foreign country your establishment is establishment is it is foreign, non-main proceeding your establishment is there that is why it is happening there your business establishment is there that is why it is happening there ok, I will give you an example Infosys But now whistleblower from US has put an allegation Whistleblower from US has put an allegation that their balance sheet is S collected Where has it been put? In US Now here SEBI has started the action In India SEBI has started the action But Infosys establishment is here I have established it. Do you understand? So this will be non-proceeding. Main is in US.

Hey, tell me brother. Do you understand? Then, chapter is just about to get, there is one second last concept.

What is that? Cross border insolvency provisions in. In IBC Code 2016, you just have to cut from point number 1, it is 234, 235, 234, 235. Below that, Just change the sequence.

It is 1, 2, 3 and 4. And the point number 1 and 2, the sequence has changed now. Write 1 or 2. For 1, write 234, 1. For 2, write 234, sub clause 2. Then for point number 3, write 235, sub clause 1. Now for clicker 235 sub clause 2 So this cross border insurancy in IBC, those two sections, those two sections are given there? Tell me. Page number 73 is given there?

What did I say? The first point is heading. Section 234 and 235. Those four provisions are given under that heading. First two provisions are that 234 sub clause 1 and 234 sub clause 2 and next next two 235 sub clause 1 235 sub clause 2 first two provisions read what is it?

we have already discussed just give me a reference read the headings CG agreement with which we called reciprocal arrangement we said it right? What does it mean? This application, again, the court proceedings of that country will be applicable here, the proceedings here will be applicable there.

How will the arrangement be done? Read it loudly in the centre. The CG may enter into agreement with the government of any country outside India. for enforcing the provisions of this code? Our, like we say, money laundering act.

In other countries, there is a recipe arrangement. Similarly, in IBC, in some foreign country, asset, what to do? To liquidate, to realize, to cross, cross border insurance, will they take the asset in custody? To sell the asset, to realise the asset, will they have to take the asset in custody?

Number one. What is number two? In CG, by notification, the official has said direct that the application of provisions of this code in relation to assets or property of creator or data situated in a country outside India with reciprocal arrangements have been made.

What does it mean? Tell me. In relation to assets or property of the creator or dator means first there is an agreement with the foreign government first there is an agreement and second under the provisions of this code, under that agreement those assets of the property of creator or dator are applicable means because of point no.1 point no.2 is applicable When there is an agreement in point no.1, then in point no.2, you can bring the assets in another country with the help of reciprocal arrangement.

Got it? What is 235? Say it.

Resolution Professional Application 2. What does AA mean? Adjudicating Authority. Read it.

Any evidence or action relating to assets of creator or dator are situated in such country and from that country, give an arrow and write, situated in country outside India. Situated in country outside India. Write with an arrow below that, with whom?

It is written, with whom reciprocal arrangements have been made. Under that single out and write, evidence or action. In relation to such assets, evidence or action in relation to such assets is required in connection with such process or proceeding. Oh oh oh Tell me In 234 sub clause 1, our government has made an agreement with that government In 234 sub clause 2, our government has notified which assets of the creator and editor which has not been included in the reciprocal arrangement In 235 After the government's notification, the resolution professional has applied to the adjudicating authority in that country and said Sorry, he has applied to our adjudicating authority and said that the asset in that other country, we need it under the proceedings And then it is given in 235 sub clause 2 After their application, the adjudicating authority may issue a letter of rec... Request to the court or an authority of such country competent to deal with such request See the sequence Again because this is the cross border insolvency of IBC court So you can expect question on this because I am in the unit settle matter First tell me if you know the house provisions Earlier, I told you about the 234 and 235. In the sequence, I told you about the 234. Our government will make an agreement with that government.

And under that agreement, under that reciprocal agreement, our government will notify the official government, assets of the data creator which we can recover by the procedure. Then in point number 3, in 235 sub clause, the resolution professional will ask our ad duty authority to take action on that asset which is being used by the other state. foreign statement situated outside the country talk you say who insolence approaches kill a flow for whose car request application on a key part would your add Judy authority who let off request Dega who's this key wahake authorities co or whose k basis for or asset fractionally a jagger a letter of request to a court or authority of such country competent will be such request from your crossword insolence each our steps char points and then on the first page number 67 I'm just they go what World Bank principles. World Bank principles.

67. Did you get it? World Bank principles. If you see in that second point.

Standards for effective insolvency. And creditor right systems as follows. Creditor right system.

We saw in cross border insolvency. Efficient and effective insolvency law. and here you can see standards for effective insolvency and creditor rights system as follows today if you see your credit history, civil report civil report is there It is not only 20 years ago, but 15-20 years ago. It has become a principle in the last 10-12 years. Why?

It is the principle of the World Bank. The World Bank has said that in your country, you can get the credit environment, credit history of every person. There should be such a platform.

So the principles of the World Bank, the standard of... See, when there will be a credit history, a credit environment, then before giving loans to any borrower, before giving advance, you can easily judge his background, which will help you in taking a decision. Prevention is better than cure, right? So the World Bank says, bring such principles, that you give money to such people who don't default. Tell me, that's why it is given in the principles of the World Bank.

They have given four points. First, Credit Environment. Then second, Insolency Law System. Third, Implementation, that is Institutional Regulatory Framework.

And fourth, Recompre... and see overarching considerations of sound investment climates. I request you all, please read the first point. Credit environment. What I said, credit history.

Read it. How did you give it there? Because it's very vast. I can say, we can do one thing there.

First, there are two points in that. First two points. Write that.

First two points. Compatible. Common. Compatible credit. Compatible credit and enforcement systems.

Third we write enforcement mechanism. Enforcement mechanism. Fourth me apliko. Credit information systems.

Credit information systems. Credit information, means the history of the borrower Credit information system, which I had given you in the civil report In point no. 5, it says, informal corporate working out Informal corporate working out, Indians are very expert in this Informal corporate working out, point no. 5 Indians are very expert in this Why did you give it? Read it What is informal? This is negotiation. Take it and settle it.

That corporate house, after that, in an informal way, by going to that bank or financial institution, by going to that financial credit, by doing negotiation in an informal way, will it settle? They settle it, but their credit environment gets disturbed. What is that? Informal corporate working out to restore an enterprise to financial viability. In that, rescheduling, restructuring, neutral tax, treatment, out of court settlement.

All these are examples. This is coming in credit environment. What is the second? Insolvency law system.

In that, you have to add effective insolvency law. World Bank says, how should it be in every country? Effective insolvency law should be there. Which integrates the broader legal compliance system of that country in maximizing value of firms assets and recovery by creators. and the laws of the country combined together to bring effective insolvency law oh oh oh world bank didn't say in 2001 and we came in 2016 so we said we brought IBC code so that there was a lot of problem We didn't bring it ourselves.

When World Bank laid down these principles to every country, we thought we should also do it. We haven't set any pioneer concept or benchmark. We brought it from Effective Insolvency Law on the words of World Bank. And then number 3, what did they say? Implementation that is institutional and regulatory framework.

What is there in that? For this insolvency law, there should be a regulator. Regulator. Like here is IBBI.

Insolvency Bankruptcy Board of India. So what is there? The Institutional Responsible for Insolvency Proceedings. The Operational System to Preserve the Integrity. So here in Institutional Responsible for Insolvency Proceedings, I will say Insolvency Bankruptcy Board of India.

I will also say Information Utility in the second point. To recognize. that integrity of insolvency is core for a successful implementation. Our adjudicating authorities, information utility, insolvency professional, insolvency professional agencies when we have set up all these, for the implementation of that institutional framework, the example I gave, if you link it, it will be very easy. So I am discussing credit environment, effective insolvency law and the last one is comprehensive, over-arcing, what is over-arcing?

including everything, comprehensive means over-arcing which includes all considerations of sound investment climate, like a good investment destination like climate, there should be insolvency law in that country In this case, how is the law of insolvency? It should be transparent, accountability, predictability is essential. If transparency, accountability, predictability is a tab, then in that case we will say, okay, what is that? Comprehensive, look what is there, to develop communication and cooperation and to have a strong lending system and corporate sector and for predictable risk allocation rules and consistent laws.

Please see here, comprehensive overarching considerations which we have discussed. Comprehensive, overarching considerations, to develop communication and cooperation and to have a strong lending system. Sound investment climate is there, so will there be strong lending systems? Strong lending system and corporate sector and for predictable risk allocation rules and consistent laws Ye ek achche Insolvency bankruptcy code or ek achche insolvency law ki nisha nahi Finally cross-border insolvency is over You see

Transcript for:Understanding Cross-Border Insolvency Concepts

Transcript for:
Understanding Cross-Border Insolvency Concepts