Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

UNCITRAL Model Law on Cross Border Insolvency: Main and Non-Main Proceedings

Updated 11 October 2026 · Fact-checked

The UNCITRAL Model Law on Cross-Border Insolvency (1997) is a template law that countries adopt to deal with debtors having assets or creditors in more than one country. It provides access, recognition of foreign proceedings, relief and cooperation. Recognition turns on whether a foreign proceeding is main (debtor's COMI) or non-main (establishment).

Understand UNCITRAL Model Law on Cross Border Insolvency

A company may have assets, branches and creditors in several countries. If it fails, each country may start its own insolvency case. Without common rules, the cases clash, assets are hidden or grabbed, and creditors are treated unequally. This is the problem of cross border insolvency.

The UNCITRAL Model Law on Cross-Border Insolvency, 1997 is a model, not a treaty. A country does not sign it. It copies it into its own law, with changes it needs. It does not unify substantive insolvency law. It only sets procedural bridges between courts and insolvency officeholders of different countries.

The stated objectives are: cooperation between courts and authorities of different states; greater legal certainty for trade and investment; fair and efficient administration of cross border insolvencies that protects all creditors and the debtor; protection and maximisation of the value of the debtor's assets; and facilitating the rescue of financially troubled businesses to protect investment and employment.

The Model Law is built on four pillars: access (a foreign representative can approach local courts and start local proceedings), recognition of foreign proceedings and the relief that follows, cooperation and communication between courts and between officeholders, and coordination of concurrent proceedings. It is usually described as having these four themes within a short text arranged in chapters: general provisions, access of foreign representatives and creditors to courts, recognition and relief, cooperation with foreign courts and representatives, and concurrent proceedings.

Key terms. A foreign proceeding is a collective judicial or administrative proceeding in a foreign state, under a law relating to insolvency, in which the debtor's assets and affairs are subject to control or supervision by a foreign court, for reorganisation or liquidation. A foreign representative is the person or body authorised in that proceeding to administer the reorganisation or liquidation or to act as its representative. A foreign main proceeding is one pending in the state where the debtor has its centre of main interests (COMI). A foreign non-main proceeding is one pending in a state where the debtor has only an establishment, meaning any place of operations where it carries out a non-transitory economic activity with human means and goods or services. The Model Law presumes, unless proved otherwise, that the registered office is the COMI. Courts also look at where the debtor's management is actually conducted and where creditors would expect to find it.

Key rules to remember

Foreign main proceeding: Foreign main proceeding = foreign proceeding pending in the state where the debtor has its COMI; Registered office is presumed to be the COMI in the absence of proof to the contrary.
Foreign non-main proceeding: Foreign non-main proceeding = foreign proceeding (other than main) pending in a state where the debtor has an establishment; Establishment means a place of non-transitory economic activity with human means and goods or services.
Effect of recognition as main: Recognition as main → automatic stay on individual actions and execution, and suspension of the debtor's right to transfer or encumber assets; These are the Model Law's automatic effects; they are subject to the exceptions in the adopting state's law. Non-main recognition gives only discretionary relief.
Four themes: Access + Recognition + Cooperation + Coordination; Use this as the skeleton for any descriptive answer.
Nature: Model Law = template for national legislation, not a treaty; Each country adopts it with modifications.

How to solve UNCITRAL Model Law on Cross Border Insolvency questions

Exam questions ask you to explain the Model Law, distinguish main from non-main proceedings, or apply COMI to facts. Use one method for all.

1Define the Model Law in one line: 1997 UNCITRAL template for procedural cooperation, adopted by states through national law.
2State the objectives that match the question, such as cooperation, certainty, fairness, asset value and rescue.
3Name the four themes: access, recognition, cooperation and coordination.
4If facts are given, identify the debtor's COMI: check registered office first, then where management and decisions actually occur and what creditors would see.
5Classify each foreign proceeding: COMI state means main; only an establishment means non-main; neither means no recognition as either.
6State the consequence: main gets automatic stay and asset protection; non-main gets discretionary relief.
7Add the Indian link briefly: the IBC has only sections 234 and 235 on cross border matters, and the Model Law is the template for the proposed framework.
8Conclude with a clear one-line answer to the question asked.

Quickest way: COMI test in four lines

When to use it: Use when a case-based question gives a debtor with offices in several countries and asks which proceeding is main.

Write the registered office country as the presumed COMI.
Check facts that rebut it: where the board meets, where key decisions and finance are handled, where creditors deal with the debtor.
Label proceedings: COMI country = main; country with operating office only = non-main.
Give the consequence of each label in one line and conclude.

Common mistakes in UNCITRAL Model Law on Cross Border Insolvency

Calling the Model Law a treaty or convention that India has signed.
UNCITRAL is a United Nations body, so students assume the output binds states.
Fix: Write that it is a model law: states adopt it through their own legislation, with modifications.
Treating the registered office as always the COMI.
The presumption is remembered but its rebuttable nature is forgotten.
Fix: Say the registered office is presumed to be the COMI unless the facts show otherwise.
Confusing COMI with an establishment.
Both relate to a place of business.
Fix: COMI is the centre of the debtor's main interests and decides main proceedings. An establishment is any place of non-transitory economic activity and decides non-main proceedings.
Saying the Model Law harmonises the substantive insolvency laws of countries.
The word 'model' suggests a uniform code.
Fix: State that it deals only with procedure: access, recognition, relief, cooperation and coordination.
Stating that India has adopted the Model Law in the IBC.
Students mix the proposed framework with the current Code.
Fix: Say the IBC currently has only sections 234 and 235 on cross border matters, and the Model Law is the basis of the proposed framework.

Worked examples

Example 1

Distinguish between a foreign main proceeding and a foreign non-main proceeding under the UNCITRAL Model Law. How is the COMI determined?

Show the solution

Foreign main proceeding: a foreign proceeding pending in the state where the debtor has its COMI.
Foreign non-main proceeding: a foreign proceeding, other than a main one, pending in a state where the debtor has an establishment.
Establishment means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services.
COMI: the debtor's registered office is presumed to be the COMI in the absence of proof to the contrary. Courts also look at where management is actually conducted and where creditors would ascertain the debtor's main interests.
Effect: on recognition as main, an automatic stay on individual actions and on transfer of assets follows. For non-main, relief is discretionary.

Answer: A main proceeding is in the COMI state; a non-main proceeding is in a state with only an establishment. COMI is presumed to be the registered office, but the presumption can be rebutted by facts. Main recognition gives automatic relief; non-main gives discretionary relief.

Example 2

Sunrise Textiles Ltd is registered in Surat. Its board meets, and all finance and strategic decisions are taken, in Dubai, and its lenders deal only with the Dubai office. It has a factory in Surat. A liquidation begins in Dubai and another in Surat. Which is main under the Model Law approach?

Show the solution

Start with the presumption: the registered office is in Surat, so Surat is the presumed COMI.
Test it against the facts: management and decisions are in Dubai, and creditors deal with Dubai.
These facts can rebut the presumption, so the COMI is likely to be Dubai.
The Dubai proceeding is then the foreign main proceeding, subject to proof.
The Surat factory is a place of non-transitory activity with people and goods, hence an establishment, so a Surat proceeding would be non-main from the viewpoint of a third country.
Consequence: a third country recognising Dubai as main grants automatic stay; recognition of Surat as non-main gives only discretionary relief.

Answer: On these facts the presumption in favour of Surat is rebutted and Dubai is the likely COMI, so the Dubai proceeding is the foreign main proceeding. The Surat proceeding is non-main, based on the factory as an establishment.

Exam tips

Always give both definitions together: main (COMI) and non-main (establishment), and then the difference in relief.
In case questions, show the presumption first, then the rebutting facts, then the conclusion.
Mention that the Model Law is a template and not a treaty; examiners reward this precision.
Link to India in one or two lines: sections 234 and 235 of the IBC, and the proposed framework based on the Model Law.
Use the four themes as headings in theory answers so the answer looks structured.

Practice questions from Cross Border Insolvency (Elective 7.5)

UNCITRAL Model Law on Cross Border Insolvency: frequently asked questions

What is the UNCITRAL Model Law on Cross-Border Insolvency in simple words?

It is a template law drafted in 1997 by the United Nations Commission on International Trade Law. Countries copy it into their own laws so their courts can recognise and cooperate with foreign insolvency cases. It does not replace national insolvency law.

What is the centre of main interests (COMI)?

COMI is the place where the debtor conducts the administration of its interests on a regular basis and which creditors can identify. The registered office is presumed to be the COMI unless there is proof otherwise.

What is the difference between a foreign main and a foreign non-main proceeding?

A main proceeding is pending in the state of the debtor's COMI. A non-main proceeding is pending in a state where the debtor has only an establishment. Main recognition brings automatic effects like a stay; non-main relief is discretionary.

Has India adopted the UNCITRAL Model Law?

The IBC has not adopted it. It contains only a limited provision on cross border matters in sections 234 and 235, which deal with reciprocal arrangements and letters of request. The Model Law has been the basis of the proposed framework for India.