Covid-19 may create stress on External Commercial Borrowings (ECB) and guarantees issued for overseas borrowings of Indian corporates. The consequences will not only be bitter for the corporates but also for the larger fraternity of creditors in India, in case a cross border insolvency framework is not implemented at the earliest.
In 1996, a prominent Indonesian business family, through their holding company, PT Bakrie Investindo (Defendant), gave a guarantee for Notes issued by its Dutch arm, Bakrie Indonesia BV. The Notes, governed by English Law, were maturing in 1999 and traded electronically. The guarantee was to whoever was the holder of notes and coupons at different points in time. The Defendant could not honour the Notes due to 1…
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