Vol 22 (2025) - Issue 2

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The English Restructuring Plan: A Tool to Resolve Financial Distress in India?

Synopsis
While India’s new restructuring regime under the Insolvency and Bankruptcy Code, 2016 ('IBC') saw huge success initially, it has become a less attractive option over time for various reasons including huge delays and inconsistency in judicial decision-making.
A quicker and more efficient alternative is therefore the need of the hour. This article explores the ossibility of using an English restructuring plan ('English RP') as a potential solution. It offers a comparison of the two legal regimes and highlights the benefits and new technologies offered by the English RP, in addition to the various considerations that stakeholders need to keep in mind when resorting to this option. It would be a tactical decision as to which option to choose in a given scenario, given the differences in how the two regimes deal with stakeholder rights, which is discussed here in some detail.
Unlike the IBC (which does not apply to foreign companies), the English RP is available to non-English companies as long as a 'sufficient connection' test is met. In addition to considering the requirements to be met for invoking the jurisdiction of English courts for a restructuring plan in respect of Indian companies, this article also analyses potential issues in relation to recognition of such English court judgments in India. While India currently lacks a cross border insolvency framework for recognition of foreign insolvency proceedings, this Notes article highlights the possibility of achieving recognition via the application of comity. While not having been previously applied in the context of an English RP, the article discusses the jurisprudential evolution of the principle in insolvency cases and concludes that this is potentially available for achieving recognition today. The article also sets the stage for a more robust mechanism of recognition through a separate cross border insolvency framework which is expected to be introduced in the near future.