Cross Border Insolvency: A Pearl in the Ocean

Abstract

International Insolvency can also be termed as Cross Border Insolvency, when the debtor having assets or liabilities in more than one jurisdiction. International insolvency sometimes termed as Cross-Border insolvency was in practice since early stages in England and it was governed by the common Law of England. The Solomon v. Rosswas the first case recorded in 1764, in this case English creditor brought action in England against the sum owing to the Dutch firm which was declared as bankrupt in Netherlands. The historical development of Cross-Border insolvency can be traced back since modern Private International Law’s birth, when state use to enter into agreements and sign treaties, to harmonize their relationship and to resolve their conflicts. The treaty of Montevideowas signed by five countries in 1889 to harmonize their fiscal policies, was the first to recognise Cross-border Insolvency. Due to the Advent of globalisation, The insolvency Law Committee was formed for drafting the bill of Insolvency and Bankruptcy bill and it Included 2 provisions for dealing with the Cross Border Insolvency issues and the increasing foreign direct investment in India, there is a strong need of increasing incorporation of company in various jurisdictions and there is an urgent need for Law on Cross Border Insolvency for solving the disputes across jurisdictions