The Insolvency and Bankruptcy Code, 2016 (“IBC”) was enacted to address insolvency and facilitate corporate resolution, not to adjudicate complex commercial disputes or operate as a debt recovery tool. However, as Indian companies increasingly operate within global corporate structures, insolvency tribunals are required to grapple with issues that extend far beyond traditional debtor-creditor relationships.
One such emerging issue lies at the intersection of insolvency law, foreign sanctions, contract law, and cross-border compliance before the National Company Law Tribunals (“NCLT”): Can a corporate debtor be said to have committed a “default” under the IBC where payment to a creditor is allegedly prohibited by a foreign…