INTRODUCTION: NEED FOR LEGISLATION
With the globalization of economy, the issues relating to corporate insolvency have assumed greater significance and a need has been felt for long for bringing about reforms in this branch of law. Moreover, with the Indian economy having been opened up for investment by foreign creditors and, internationally, the Indian corporate also making investments in companies outside, the realm of cross-border insolvency law has multiplied greatly.
Cross – border insolvency is a term used to describe circumstances in which an insolvent debtor has assets and/or creditors in more than one country.
Many businesses have interests stretching beyond their home jurisdictions. Firms are increasingly organizing their activities on a global scale, forming production chains including inputs that cross national boundaries. With the advent of sophisticated communications and information technology cross-border trade is no longer the preserve only of large multi-national corporations.
These factors have led to an increasing number of situations where Australian businesses are involved in matters where cross-border insolvency issues arise. This trend is not likely to change.
The stream of insolvency laws can be segregated chiefly under two heads:
· Personal Insolvency, which deals with individuals and partnership firms governed by Provisional Insolvency Act, 1920 and Presidency Towns Insolvency Act, 1908 and,
· Corporate Insolvency, whose consequence is winding up of the company under the Companies Act, 1956.
In the process of liberalization, deregulation and adopting market economy,
is experiencing a massive growth of retail loans to individuals, housing loans and credit card users. On account of phenomenal rise in retail lending, it will be necessary in the near future to give a re-look at the personal insolvency laws to ensure that any insolvency proceedings against individuals are also expeditiously decided. India
However, the basic tenets of corporate insolvency can be classified as:
- restoring the debtor company to profitable trading where it is practicable;
- to maximize the return to creditors as a whole where the company itself cannot be saved;
- to establish a fair and equitable system for the ranking of claims and the distribution of assets among creditors, involving a redistribution of rights;
- and to provide a mechanism by which the causes of failure can be identified and those guilty of mismanagement brought to book;
- placement of the assets of the company under external control;
- substitution of collective action for individual pursuits;
- avoidance of certain transactions and fraudulent conveyances, dissolution and winding up etc.
In context of corporate laws, the word "insolvency" has neither been used nor defined. However, Section 433 (e) of the Companies Act, 1956 covers a company, which is "unable to pay its debts", and thus constitutes a ground for winding up of the company. Inability to pay its debts would be a case where, a company's entire capital is lost in heavy losses and no accounts are prepared and filed and no business is done for one year. In such circumstances, the Registrar of Companies makes out a case of inability to pay debts. These debts however, would only include debts, incurred after the legal incorporation of the Company. Inability to pay debts has even been amplified in Section 434 wherein, a creditor with a due of Rs. 500 or more serves a demand by registered post and the company neglects to pay, secure or compound the same in 3 weeks, in cases where the execution of a decree returned unsatisfied and also where the Court is otherwise satisfied that the company is unable to pay its debts.
Pursuit of Individual Claims
In the sphere of insolvency laws in
1. Winding up procedure implies all personal rights be converted into right to prove debt in winding up.
2. Under section 446, stay on all suits and the winding up Court to decide all suits by or against the company.
3. A secured creditor may enforce security interest without a suit and therefore, real rights of secured creditors are protected.
4. Criminal proceedings or proceedings against directors or officers are not stayed.
5. Income tax proceedings will continue against the liquidator.
Risks of cross-border insolvency
One of the risks that all businesses face is that of a trading partner's failure. Most domestic laws provide for the handling of an insolvent enterprise. Typically, domestic laws will prescribe procedures for:
- identifying and locating the debtors' assets;
- 'calling in' the assets and converting them into a monetary form;
- identifying and reversing any voidable or preference transactions which occurred prior to the administration;
- identifying creditors and the extent of their claims, including determining the appropriate priority order in which claims should be paid; and
- making distributions to creditors in accordance with the appropriate priority.
In a cross-border insolvency context, additional complexities that may arise include:
- the extent to which an insolvency administrator may obtain access to assets held in a foreign country;
- the priority of payments: whether local creditors may have access to local assets before funds go to the foreign administration, or whether they are to stand in line with all the foreign creditors;
- recognition of the claims of local creditors in a foreign administration;
- whether local priority rules (such as employee claims) receive similar treatment under a foreign administration;
- recognition and enforcement of local securities over local assets, where a foreign administrator is appointed; and
- application of transaction avoidance provisions.
The additional complexities surrounding cross-border insolvencies necessarily result in uncertainty, risk and ultimately costs to businesses. It would be of overall benefit to businesses in all countries to have adequate mechanisms in place to deal efficiently and effectively with cross-border insolvencies.
In spite of the urgent need for a legislation regarding the Law for Cross- Border Insolvency, however, there is no particular law enacted for this particular reason. It is only by a handful legislations that the entire aspect is governed by the Courts, in case of any dispute.
The important laws and their respective sections in this regard are:
1. THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
2. THE SECURITIES AND EXCHANGE BOARD OF
ACT, 1992 INDIA
3. THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985
4. THE COMPANIES ACT, 1956
5. THE TRANSFER OF PROPERTY ACT.
- Dealing with the Recovery of Debts due to Banks and Financial Institutions Act, 1993, it is basically an act incorporated to relate to the Recovery of Debts, which is an important aspect of the Insolvency concept. This is so because once a Company has been declared insolvent, the role of the Creditors has not ended. In fact, now he has a far important role to play because of the money and credits that are stuck up in the company, due to be recovered. Moreover, since the Companies, who are organized at a larger scale, it is more of a common feature that the creditors would be Banks or Financial Institutions who allot large amounts of loans to the Companies. Hence, the Enactment of this Law. Moreover, the legislation is such that, with respect to the concept of insolvency, it finds a great application and hence, all the provisions of the Act are equally important, in order to understand the nature of the Condition/position of the Company.
- Coming on to the Securities and Exchange Board of
, 1992, it is highly important with regard to the Private Companies functioning in the Country. This is so because of the Institution’s position as a Regulator of the Private Companies in India . It is organized to regulate the Companies in order to avoid any complications and to safeguard the interest of the Companies and the Stakeholders. India
The Short Title of the Act provides that-
“to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto.”
This clearly illustrates the status of the Act with respect to the governance of the Companies and the rights of the Stakeholders. Here also, all the provisions of the Act are equally important.
- Next being The Sick Industrial Companies (Special Provisions) Act, 1985, this act deals with the laws governing the aspects of the Sick Companies, that includes all the companies under section 3 of the Companies Act, 1956. Basically, a sick industrial company means an industrial company (being a company registered for not less than five years and employing fifty or above workmen), which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth. Net worth has been defined as the sum total of the paid up capital and free reserves. Hence, the companies who have been declared insolvent fall under the definition under this Act thereby, making the provisions applicable. Hence, it proves to be an important legislation with regard to the aspect of Sick Companies.
- Lastly, the Companies Act, 1956, being the most relevant laws of all with respect to the Insolvency Law, relating to the Corporate regime. However, the Companies Act does not specifically talks about the position of the Insolvent Companies, rights of the Creditors and Investors, Liabilities of the Debtors, etc. But, the various provisions talk about the relative position and condition of the concerned Companies.
Some of the Relevant provisions are-
(a) 391.-Power to compromise or make arrangements with creditors and members,
(b) 392.-Power of High Court to enforce compromises and arrangements
(c) 393.-Information as to compromises or arrangements with creditors and members
(d) 394.-Provisions for facilitating reconstruction and amalgamation of companies
(e) 395.-Power and duty to acquire shares of shareholders dissenting from scheme or contract approved by majority
(f) 396.-Power of Central Government to provide for amalgamation of companies in public interest
(g) 416.-Contracts by agents of company in which company is undisclosed principal
(h) 417.-Employees' securities to be deposited in post office savings bank or Scheduled Bank
(i) 433.-Circumstances in which company may be wound up by Court
(j) 434.-Company when deemed unable to pay its debts
(k) 448.-Appointment of Official Liquidator
(l) 456.-Custody of company's property
(m) 464.-Appointment and Composition of committee of inspection
(n) 474.-Power to exclude creditors not proving in time
(o) 484.-Circumstances in which company may be wound-up voluntarily
(p) 488.-Declaration of solvency in case of proposal to wind-up voluntarily.
COMMITTEE REPORTS ON THE Insolvency Law
- Eradi Committee Report
In the year 1999, the Government of India set up a High Level Committee headed by Justice V.B. Balakrishna Eradi, a superannuated Judge of Supreme Court of India for remodeling the existing laws relating to insolvency and winding up of companies and bringing them in time with the international practices in this field.
The recommendations given by the Report have been incorporated in the Companies Act.
The Committee recommended that:
(a) The jurisdiction, power and authority relating to winding up of companies should be vested in a National Company Law Tribunal which should be vested with the functions and power with regard to rehabilitation and revival of sick industrial companies, a mandate presently entrusted with BIFR under SICA.
(b) The 1956 Act should be suitably amended to take the power away from High Court and the transfer of the pending winding up proceedings to the Tribunal.
(c) The adoption of the international trend in law relating to corporate bankruptcy, namely, sell the assets first as quickly as possible, and relegate to a later stage the adjudication of claims and distribution of proceeds.
(d) An in depth assessment of the office of Official Liquidators, in view of inadequate and incompetent manpower and absence of latest office equipments and technologies.
(e) A liquidation Committee consisting of creditors of the company on the lines of Section 141 of the Insolvency Act, 1986 of UK be set up to assist the Liquidator.
(f) The repeal of SICA and recommended the ameliorative, revival and reconstructionist procedures obtaining under it to be reintegrated in a suitably amended form in the structure of the 1956 Act except that there is no stand still provision like Section 22 of SICA.
(g) Part VII of the Companies Act, 1956 should incorporate a new substantive provision to adopt the UNCITRAL Model Law as approved by the United Nations and the Model Law itself may be incorporated as a Schedule to the Companies Act, 1956, which shall apply to all cases of Cross-Border insolvency.
(h) Adopt the necessary principles enunciated under the heading "Legal Framework", "Orderly and Effective Insolvency Procedures - Key issues", to bring the provisions of the Companies Act, 1956 in line with international practices.
The Committee completed its work and submitted its report to the Central Government in the year 2000.In August 2001, the Companies (Amendment) Bill, 2001 and the Sick Industrial Companies (Special Provisions) Repeal Bill, 2001 were introduced in the Parliament of India.
Report of the Standing Committee on International Financial Standards and Codes
In order to facilitate positioning of international financial standards and codes in relevant areas of the financial system in India and to guide the overall process of implementation of appropriate changes in respect of various segments of the financial system, Reserve Bank of India (RBI) in consultation with Government of India, in December 1999, constituted a ‘Standing Committee on International Financial Standards and Codes’ under the Chairmanship of Deputy Governor, RBI and Secretary, Economic Affairs, Government of India as Alternate Chairman.
The Committee was entrusted with the task of identifying and monitoring developments in global standards and codes being evolved by standard setting bodies as part of the efforts to create a sound international financial architecture and consider all aspects of applicability of these standards to the Indian financial system. The Committee was also asked to consider plotting a road map for aligning
’s standards and practices as necessary and desirable in the light of evolving international practices, periodically reviewing the status and progress in regard to the codes and practices, and reaching out its reports on the above to all concerned organizations in public or private sectors. India
In the light of Asian crises, the need for fundamental changes in the international financial architecture acquired great urgency. Many proposals were made for strengthening the international financial system and the focus of these proposals was broadly on identifying indicators of financial vulnerability, development of sound international codes, standards and best practices, introduction of pre-emptive measures and safety nets, and designing a framework for crisis management. In this context, development of international standards and codes is one important element of the overall effort in the aftermath of the Asian crisis to reform the international financial architecture.
As part of the effort to strengthen financial systems and improve coordination among the agencies responsible for them, the Financial Stability Forum (FSF) was established in April 1999. Its mandate is to promote international financial stability by improving the functioning of markets and reducing systemic risk through information exchange and international cooperation in supervision and surveillance of financial markets. The FSF has drawn together various standard-setting bodies which were constituted by means of cooperation among central banks, international financial institutions, national authorities and international supervisory and regulatory bodies.
The various Advisory committees constituted in the Standing Committee for the Assessment were-
(1) The Advisory Group on Transparency in Monetary and Financial Policies
(2) The Advisory Group on Fiscal Transparency
(3) The Advisory Group on Data Dissemination
(4) The Advisory Group on Payment and Settlement System
(5) The status of the Accounting Standards (AS) issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI)
(6) The Advisory Group on Bankruptcy Laws
(7) The Advisory Group on Corporate Governance
(8) The Advisory Group on Banking Supervision
(9) The Advisory Group on Securities Market Regulation
(10) The Advisory Group on Insurance Regulation
Now the report in relevance here is the Report by the Advisory Group on Bankruptcy Laws, whereby it studied in detail the existing status of the legislation in relation to international standards on bankruptcy laws and the position obtaining in other countries as also Cross – Border Insolvency issues. The recommendations, inter alia, consisted of passing of a new legislation on a comprehensive bankruptcy code, and introduction of a professional bankruptcy institution known as the “Trustee”, repeal of Sick Industrial Company (Special Provisions) Act and abolition of BIFR. The Report also has dealt with an effective trigger point for the operations of the bankruptcy code, special provisions for banks and financial institutions, cross-border bankruptcy principles and an orderly and effective insolvency procedures that would facilitate efficient servicing of the need of the corporations requiring timely intervention of restructuring and a very efficient exit system which maximizes the protection of the interest of the creditors and the investors with quick liquidation procedures and well laid down game rule for dispensation of the claims. The Report also covers among others, a comparative analysis of the Indian legal situation and bankruptcy laws vis-a-vis the USA and U.K., and international standards and Indian situation in respect of UNCITRAL model law on Cross – Border Insolvency, EC directive on finality in payment and securities settlement system and Cross – Border Insolvency Concordat Committee J.
RESTRUCTURING and LIQUIDATION
An effective insolvency system is an important element of financial system stability. There is a need for an effective Insolvency framework, which enables resolution of insolvency in a timely and efficient manner. Corporate insolvency may be addressed through Companies Act. A separate Insolvency law is not necessary at present.
A definitive and predictable time frame is needed for rehabilitation and liquidation process.
The law should strike a balance between rehabilitation and liquidation process. It should provide an opportunity for genuine efforts towards revival. Only where revival/rehabilitation is not feasible, winding up should be resorted to.
Both debtors and creditors should have fair access to insolvency system. Rather than net worth erosion principle, test for insolvency should be default in payment of matured debt on demand within a prescribed time [liquidity test]. Debtors seeking rehabilitation should be able to approach Tribunal only with a draft scheme. Creditors being at least 3/4th in value may also file scheme.
A limited standstill period is essential for genuine business restructuring to be regulated through Tribunal’s Orders during which there is prohibition on unauthorized disposition of debtors’ assets and suspension of actions by creditors to enforce their rights. The law should provide for appropriate prohibitions on certain Debtors’ rights [transfer, sale or disposing of assets etc.] subject to certain exemptions on initiations of insolvency.
There should be duty on companies to convene creditors and shareholders meeting on default in payments to creditors to consider suitable steps to protect interest of stakeholders, preserve assets and adopt necessary steps to contain Insolvency.
The debtor assets should be subjected to supervision or management of impartial, independent, and effective Administrator.
Provisions should be made for setting up of Committee of secured creditors to safeguard their interest and provide a suitable platform for creditors’ participation in the process. The law should also provide for mechanism to recognize and record claims of unsecured creditors.
A Panel of Administrators and liquidators should be prepared and maintained by an independent body out of experienced and knowledgeable Insolvency Practitioners. Private professionals should play a meaningful role in all aspects of insolvency process. The law should encourage and recognize concept of Insolvency Practitioners.
The law should prescribe a flexible but transparent system for disposal of assets efficiently and at maximum value. Secured creditors’ claim should rank pari passu with workmen. Public interests, Government claims should not get precedence over private rights. Revival plan should be required to be approved by secured creditors holding 3/4th of total value to be binding on all creditors.
Establishment of NCLT would provide a major initiative for insolvency system reforms in the country and should be enabled quickly. NCLT should have general, non intrusive and supervisory role. The Tribunal should adopt a commercial approach to dispute resolution observing the established legal principles of fairness in the process. Selection of President and Members of the Tribunal should be such so as to enable a wide mix of expertise for conduct of its work.
Provisions relating to rehabilitation cess should be replaced by the concept of “Insolvency Fund” with optional contributions by companies. Government may make grants for the Fund and provide incentives to encourage contributions by companies to the Fund. Companies which make contributions to the Fund should be entitled to certain drawing rights in the event of insolvency. Administration of the Fund should be by an Independent Administrator. Insolvency Fund should not be linked/credited to Consolidated Fund of India.
A suitable framework for Cross Border Insolvency which provides for rules of jurisdiction, recognitions of foreign judgments, co-operation and assistance among courts in different countries and choice of law is required. The Government should consider adoption of UNCITRAL Model Law on Cross Border Insolvency with suitable modifications at an appropriate time.
UNCITRAL Model Law on Insolvency
The United Nations Commission on International Trade Law (UNCITRAL) enacted the UNCITRAL Model law on Cross- Border Insolvency.
As the Preamble of the Enactment makes clear the objects of the Law, which are –
(a) Cooperation between the courts and other competent authorities of this State and
foreign States involved in cases of cross-border insolvency;
(b) Greater legal certainty for trade and investment;
(c) Fair and efficient administration of cross-border insolvencies that protects the interests
of all creditors and other interested persons, including the debtor;
(d) Protection and maximization of the value of the debtor’s assets; and
(e) Facilitation of the rescue of financially troubled businesses, thereby protecting
investment and preserving employment.
Background to the UNCITRAL Model law
UNCITRAL was created by the United Nations in 1966 'to further the progressive harmonization and unification of the law of international trade'.
The original suggestion to undertake work on cross-border insolvency was made to UNCITRAL by practitioners directly concerned with the problem, in particular at the UNCITRAL Congress, 'Uniform Commercial Law in the 21st Century' held in May 1992.
There was some opposition to UNCITRAL commencing this work, along the lines that national differences in approach to Insolvency law and policy would present insuperable difficulties to getting agreement among countries. However, in 1995 the Commission agreed to establish a Working Group to develop Model legislation relating to cross-border Insolvency. The Treasury and the Attorney-General's Department, which has responsibility for personal Insolvency policy, supported the Working Group of UNCITRAL in the development of the Model Law.
Over the next two years the text of the Model Law was developed at meetings of the Working Group, comprising representatives from 36 UNCITRAL member countries and 40 observer states, in consultation with 13 international organisations representing practitioners, judges and lenders. In comparison with other comparable projects, the Model Law was developed quickly, due in large part to the enthusiasm for the work on the part of the participants.
The Working Group on Insolvency presented its finalized text to the UNCITRAL annual session of 1997, where it was endorsed by the Commission.
The UNCITRAL Model Law on Cross-Border Insolvency was adopted by the Untied Nations Commission on International Trade Law in 1997 and is designed to assist States to equip their insolvency laws with a modern, harmonized and fair framework, which will address more effectively cases of cross-border insolvency. This would include cases where the insolvent debtor as assets in more than one State or where some of the creditors of the debtor are not from the State where the insolvency proceeding is taking place.
The Model Law respects the differences among different national procedural laws and does not attempt to impose a substantive unification of insolvency law.
This consultation seeks to build on the Government’s commitment to reduce red tape and to produce clearer information on regulatory issues. The aim of the consultation is to provide a background and explanatory information and to seek views on the implementation of the Model Law on Cross-Border Insolvency with specific comments on the draft articles and procedural rules.
Features of the UNCITRAL model law
- National insolvency laws are often not designed to cope with cross-border insolvencies and the problems that arise, both jurisdictional and practical, make it difficult for insolvency officeholders to administer such insolvencies speedily and effectively. The uncertainty that arises in cross-border insolvencies is widely seen as a barrier to trade and the flow of investment from country to country. A universal approach to cross-border insolvencies is crucial, as is the co-operation between national courts, authorities and practitioners.
- One of the obstacles to the flow of trade is the conflict of laws between different jurisdictions with regard to insolvency proceedings, which can result in the dissipation of assets and the loss of an opportunity to save a viable business. The UNCITRAL Model Law on cross-border insolvency is that body’s attempt to promote modern and fair legislation for cases where the insolvent debtor has assets in more than one State.
- Implementation of the Model Law will be beneficial in serving the cause of fairness towards creditors worldwide and will provide an example to other States in terms of our readiness to engage in a genuinely two-way process of cooperation in international insolvency matters. Over time, when other States implement the Model Law, GB officeholders will progressively enjoy the same benefits abroad, in terms of reduced administrative costs incurred in recovering assets from overseas, thereby increasing funds available for distribution to creditors.
- The Model Law addresses specific issues set out in the body of its text. These issues are the recognition of foreign proceedings, co-ordination of proceedings concerning the same debtor, rights of foreign creditors, the rights and duties of foreign representatives, and co-operation between authorities in different States. It does not address nor does it seek to unify the substantive and procedural law on insolvency of the enacting States. It simply seeks to ease the access of foreign representatives and creditors to our courts and insolvency procedures.
- The Model Law entitles a foreign representative to apply directly to the courts of the enacting State to commence insolvency proceedings under the laws of that State and to participate in such a proceeding once commenced.
- The Model Law also sets out a procedure for a foreign representative to seek recognition and relief for foreign insolvency proceedings. Proceedings will be recognized as main proceedings or as non-main proceedings depending on where the debtor has its Centre of main interests. In simple terms the location of a debtor’s centre of main interest will be the habitual residence or registered office but may depend on factors such as the whereabouts of the main trading presence or business or where the main administrative functions are carried out.
- The Model Law is a legislative text that forms the basis of a recommendation to States for incorporation into their national law. When drafting the articles, we have tried to stay as close to the drafting in the Model Law as possible to try and ensure consistency, certainty and harmonization with other States enacting the Model Law and to provide a guide for other States who are considering enacting the law. Our policy has been to try and enact as drafted, which may result in the use of some terms, which may not be standard in Indian insolvency law.
- The Model Law is quite general in its detail and broad brush in its use of terminology, which is again something not normally found in British legislation. However, the courts will be able to interpret the text and apply it to the detail of specific cases.
A cross-border insolvency arises when an insolvent entity is placed into a form of insolvency administration in one State but has assets or debts in other States. Such a proceeding can be inefficient and costly and in addition the costs of accessing foreign courts can be prohibitive.
There have been relatively few cases to date of cross-border insolvency proceedings involving GB entities. There is no typical case profile and no statistics kept in respect of number, costs or impact. The assumption remains that the incidence of cross-border insolvencies will be very low although it should be noted that such cases might involve substantial assets or debts and by their very nature, be complex.
In the process of deregulation and liberalization, number of restrictions on undertaking industrial activities has been withdrawn and relaxed. There is a need to take the process of liberalization a step further and recognize that so long as a company is acting in the interest of shareholders and otherwise observing the law of the land it should have the freedom to manage its affairs, merge, amalgamate, restructure and reorganize or otherwise plan its affairs as it considers best in the interest of the stakeholders. Interference by the Government or court or any tribunal should only be in the event of any detriment to the shareholders or under the Competition Act to prevent monopolies or restrictive trade practices. While undertaking reforms in the Insolvency Laws there is a need to change the focus from strict regulation of the activities of companies to granting freedom to the industry in conducting its business activities and lay down norms for protection of interest of stakeholders.
However, with the developing ambit of the Globalization in the country, there is a need for an effective Insolvency Law for the corporate organs functioning from abroad and those Indian Companies functioning outside the country.
Further, as has been mentioned in the research work, the features and the advantages in adopting the UNCITRAL model law on Insolvency. It pursues a well-defined approach towards understanding and dealing with the concepts and the complications arising out of the Cross- Border Insolvency.
Moreover, with the advent of time, no country would remain strictly within its own regime and boundaries, For the purposes of gaining profits and the expansion of market, the Companies from distinct countries will emerge into a common market.
Now, in such a situation, it becomes difficult in determining certain aspects like liabilities of the debtor company, rights of the creditors, etc. However, the most difficult yet most important question to be sorted out is – Laws of which country shall be made applicable ? The laws of no two countries are similar, however, the principle on which they are based may be the same.
But the dispute in the application of a common law becomes the problem. Therefore, the UNCITRAL model law should be accepted by all the countries who have adopted the policy of Globalization and Liberalization, so that the common problem arising can be sorted out in a more effective and an efficient manner.
A classic example of such a case is the ENRON Co. Case involving
India whereby the MNC was based in and was operating in the Indian Market. However, the company turned insolvent thereby leading to arising of conflicts relating to the subject in question. India
, as cited from pib.nic.in/archieve/lreleng/yr2000/raug2000/r31082000.html Annexure I.