In Context
- The Economic Survey 2021-22 has called for a standardised framework for Cross-Border insolvency as the Insolvency & Bankruptcy Code (IBC).
Need
- The IBC currently does not allow for automatic recognition of any insolvency proceedings in other countries.
- The present provisions lead to uncertainty of outcomes of claims for creditors, debtors and other stakeholders as well.
- This will help lenders of debt-ridden companies to claim and recover the corporations’ assets and liabilities on foreign shores also.
Need for UNCITRAL
- It has been highlighted in the report of the Insolvency Law Committee (ILC) which had recommended the adoption of the United Nations Commission on International Trade Law (UNCITRAL) with certain modifications to make it suitable to the Indian context.
- Trade means faster growth, higher living standards, and new opportunities through commerce.
United Nations Commission on International Trade Law (UNCITRAL)
- About:
- It is the core legal body of the United Nations system in the field of international trade law.
- UNCITRAL was established in 1966 with a recognition that “international trade cooperation among States is an important factor in the promotion of friendly relations and, consequently, in the maintenance of peace and security”.
- Its business is the modernization and harmonization of rules on international business.
- There are 60 members in UNCITRAL elected for six years: 14 from Asia, 14 from Africa, 10 Latin American and Caribbean, 8 Eastern European and 14 western European and other states.
- Role of UNCITRAL:
- UNCITRAL is formulating modern, fair, and harmonized rules on commercial transactions. Includes:
- Conventions, model laws and rules which are acceptable worldwide
- Legal and legislative guides and recommendations of great practical value
- Updated information on case law and enactments of uniform commercial law
- Technical assistance in law reform projects
- Regional and national seminars on uniform commercial law
- UNCITRAL is formulating modern, fair, and harmonized rules on commercial transactions. Includes:
Source: TH
