Sep 30, 2019

NCLAT approves Cooperation between Dutch Insolvency Trustee and Resolution Professional under the IBC

NCLAT has for the first time considered the issue of parallel insolvency proceedings against the same entity across multiple jurisdictions, in its decision dated September 26, 2019 (‘Order’), passed in relation to the Corporate Insolvency Resolution Process (‘CIRP’) of Jet Airways (India) Limited (‘Jet’). In addition to the Indian CIRP, insolvency proceedings have also been admitted against Jet in the UK and in the Netherlands. The Dutch court-appointed bankruptcy trustee (‘Dutch Trustee’) approached the NCLAT seeking cooperation from the Indian resolution professional (‘Indian RP’). The NCLAT had directed the Dutch Trustee and the Indian RP to explore means of cooperation. Accordingly, the Dutch Trustee and the Indian RP had negotiated a protocol governing the mode and extent of cooperation. By the Order, the NCLAT approved a cross-border insolvency protocol agreed to between the Indian RP and the Dutch Trustee. This assumes significance given that neither Dutch law nor Indian law contain a framework recognising or providing for cross-border insolvency issues such as the present case. The NCLAT found that the Dutch Trustee was “equivalent” to the Indian RP, and was entitled to attend meetings of the Committee of Creditors (albeit without a right to a vote).

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