Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

Cross Border Insolvency: Cooperation, Recognition and Landmark Cases

Updated 11 October 2026 · Fact-checked

Cross border insolvency cooperation means courts and insolvency officials in different countries coordinate when a debtor has assets or creditors in more than one country. Recognition lets a foreign proceeding have effect locally. A protocol is an agreed working plan between courts or officials. Lehman Brothers and Jet Airways are the standard case studies.

Understand Cooperation, Recognition and Landmark Cases

A company can have assets, creditors and contracts in several countries. If each country runs its own insolvency process with no coordination, assets get seized at random, creditors race each other, and value is lost. Cross border insolvency law tries to prevent this.

There are two broad approaches. Under universalism, one main proceeding, usually in the debtor's home country, controls the whole estate worldwide. Under territorialism, each country deals only with assets inside its borders. Most real systems sit between the two, and aim for cooperation.

Recognition means a court in one country accepts a foreign insolvency proceeding as valid and gives it local effect, such as a stay on creditor action. The UNCITRAL Model Law uses the terms foreign main proceeding (in the country where the debtor has its centre of main interests) and foreign non-main proceeding (where the debtor only has an establishment). Recognition is not the same as taking over the case. The local court still decides what relief to give.

Court-to-court cooperation means judges and insolvency officials communicate, share information and coordinate hearings. A protocol is a written agreement, approved by the courts concerned, that sets out how the proceedings will run side by side: who decides what, how information is shared, how claims are admitted and how assets are distributed. Protocols are practical tools. They are not statutes.

In India, the Insolvency and Bankruptcy Code, 2016 has only a limited framework. Section 234 lets the Central Government enter reciprocal arrangements with other countries. Under Section 235, if a resolution professional, liquidator or bankruptcy trustee believes assets of the corporate debtor (or debtor, including a personal guarantor of a corporate debtor) are in a country with which a reciprocal arrangement exists under Section 234, he may apply to the Adjudicating Authority. If it is satisfied that evidence or action relating to those assets is needed, it may issue a letter of request to a court or authority of that country. India has not enacted the UNCITRAL Model Law in the Code. Cases therefore show how the gap was handled.

Lehman Brothers (2008): the US investment bank collapsed with entities and assets in many countries. Parallel proceedings ran in the US and the UK, among others. Because the group was so interconnected, the lack of coordination caused delay and cost. It is cited as a case that showed the need for protocols and cooperation. Protocols were used between officials of some of the proceedings.

Jet Airways (2019): Jet Airways went into CIRP in India. A parallel insolvency proceeding began in the Netherlands, where an administrator was appointed. The Dutch court treated its proceeding as the main one, and the NCLAT in India recognised the need for cooperation and, in effect, permitted a joint approach through a cross border insolvency protocol between the Indian resolution professional and the Dutch administrator. It is the key Indian example of a protocol being used without a statutory Model Law framework. Check the exact facts and directions in your ICSI study material before writing details in the exam.

Key rules to remember

Section 235(1) trigger: RP / liquidator / bankruptcy trustee believes assets are in a country with a Section 234 reciprocal arrangement → applies to the Adjudicating Authority; The applicant must show evidence or action relating to those assets is required in the process or proceeding.
Section 235(2) order: Adjudicating Authority satisfied → may issue a letter of request to a court or authority of that country; The word is 'may'. It is not compulsory. The request goes to a court or authority competent to deal with it.
Who can apply under Section 235: Resolution professional (CIRP), liquidator (liquidation) or bankruptcy trustee (bankruptcy); The assets can be those of a corporate debtor or debtor, including a personal guarantor of a corporate debtor.
Section 234 link: Section 235 works only for countries with reciprocal arrangements under Section 234; No arrangement with the country means Section 235 cannot be used.
Model Law concepts: Foreign main proceeding = centre of main interests; foreign non-main proceeding = establishment; These are UNCITRAL Model Law ideas, not part of the Code.
Protocol: Protocol = agreed, court-approved working plan between proceedings in different countries; A practical coordination tool. It does not replace the law of either country.

How to solve Cooperation, Recognition and Landmark Cases questions

Use this order for any theory, case-study or problem question on cross border cooperation, recognition or protocols.

1Identify the facts: where the debtor is based, where its assets and creditors are, and which proceedings are running in which countries.
2Define the key terms briefly: cooperation, recognition, main and non-main proceeding, protocol.
3State the legal basis. For India, cite Section 234 (reciprocal arrangements) and Section 235 (application and letter of request).
4Apply the conditions of Section 235 to the facts: who is applying, whether assets are abroad, whether a Section 234 arrangement exists, and whether evidence or action is needed.
5Link to the relevant case where the facts match: Lehman Brothers for parallel proceedings and protocols, Jet Airways for an Indian CIRP with a foreign main proceeding.
6Conclude clearly: what the Adjudicating Authority may do, or what cooperation tool suits the situation.
7Add a practical point: the RP's duties, record keeping, and the need for the court to approve any protocol.

Quickest way: Four-line answer frame

When to use it: Short-note questions, or when you have under eight minutes for a case-study question.

Line 1: define the problem, i.e. assets and creditors in more than one country.
Line 2: give the Indian law, Sections 234 and 235, with the key conditions.
Line 3: name the case and its lesson, Lehman Brothers or Jet Airways, with protocol.
Line 4: conclude with the gap, that India has no Model Law framework in the Code, and the practical remedy.

Common mistakes in Cooperation, Recognition and Landmark Cases

Saying Section 235 applies to any foreign country.
Students remember 'letter of request' and forget the reciprocal arrangement condition.
Fix: Always write that the country must have a reciprocal arrangement under Section 234.
Saying the Adjudicating Authority must issue a letter of request.
Students skim the section and read 'may' as 'shall'.
Fix: Write that it may issue one, and only if satisfied that evidence or action is required.
Stating that the UNCITRAL Model Law is part of the IBC.
Students confuse the proposed framework with the Code as it stands.
Fix: Say the Model Law is a global template and that the Code does not adopt it; only Sections 234 and 235 apply.
Treating a protocol as a law or a binding statute.
The word sounds formal.
Fix: Describe it as a court-approved practical agreement between proceedings for coordination.
Mixing up the facts of Jet Airways and Lehman Brothers.
Both are 'cross border' and are studied together.
Fix: Remember: Lehman is a global group collapse with many parallel proceedings; Jet Airways is an Indian CIRP with a parallel Dutch proceeding and a protocol.
Letting the RP apply directly to a foreign court.
Students ignore the role of the Adjudicating Authority.
Fix: The RP applies to the Adjudicating Authority, which issues the letter of request.

Worked examples

Example 1

Sharma Textiles Ltd is in CIRP in India. The resolution professional finds that the company owns a warehouse in a country with which India has a reciprocal arrangement under Section 234. He needs evidence about the warehouse. Advise him on the procedure.

Show the solution

Provision: Section 235 allows a resolution professional who believes assets are in a country with a Section 234 reciprocal arrangement to apply to the Adjudicating Authority.
Facts: the process is a CIRP, so the RP is the proper applicant; the asset is abroad; a reciprocal arrangement exists.
Application: the RP applies stating that evidence or action about the warehouse is required in connection with the CIRP.
The Adjudicating Authority must be satisfied that the evidence or action is required.
If satisfied, it may issue a letter of request to a court or authority of that country competent to deal with it.

Answer: The RP should file an application before the Adjudicating Authority under Section 235(1). If it is satisfied that evidence or action is required, it may issue a letter of request to a competent court or authority of that country under Section 235(2).

Example 2

Write a short note on how the Jet Airways case illustrates the use of a protocol in cross border insolvency.

Show the solution

Context: Jet Airways was admitted to CIRP in India, and a parallel insolvency proceeding was opened in the Netherlands.
Problem: two proceedings over the same debtor could conflict over assets and creditor claims, and the Code has no Model Law framework.
Solution: a cross border insolvency protocol was adopted between the Indian resolution professional and the Dutch administrator to coordinate the proceedings, with court involvement.
Meaning of a protocol: an agreed plan on information sharing, roles and treatment of assets and claims.
Lesson: practical cooperation is possible even without a full statutory framework, but a statute would give more certainty.

Answer: Jet Airways shows that courts and insolvency officials in India and the Netherlands used a court-approved protocol to coordinate parallel proceedings. It demonstrates cooperation in practice and highlights the need for a clear statutory framework in India.

Exam tips

Quote Section 235 conditions in order: opinion of RP, liquidator or trustee; assets abroad; Section 234 arrangement; application to the Adjudicating Authority; satisfaction; letter of request.
In case studies, name the case only when the facts match, and state its lesson in one line.
Define protocol, recognition, and main and non-main proceeding in a sentence each; examiners reward precise terms.
Always state the limitation: the Code has only Sections 234 and 235 and does not adopt the Model Law.
If unsure of exact facts of a case, write the principle and avoid inventing dates or figures.

Practice questions from Cross Border Insolvency

Cooperation, Recognition and Landmark Cases: frequently asked questions

What is a cross border insolvency protocol?

It is a written agreement, approved by the courts concerned, that sets out how insolvency proceedings in different countries will work together. It covers matters like information sharing, roles and treatment of claims. It is a practical tool and not a statute.

Which sections of the IBC deal with cross border insolvency?

Section 234 allows reciprocal arrangements with other countries, and Section 235 allows a letter of request to a foreign court or authority. Section 235 applies only where such an arrangement exists.

Who can apply for a letter of request under Section 235?

The resolution professional, liquidator or bankruptcy trustee, depending on the stage. The application is made to the Adjudicating Authority, which may then issue the letter of request if satisfied that evidence or action is required.

Why are Lehman Brothers and Jet Airways studied together?

Both show the problems and solutions of parallel proceedings in different countries. Lehman Brothers shows the cost of weak coordination in a global group collapse. Jet Airways shows an Indian CIRP coordinated with a foreign proceeding through a protocol.