The Conclave brought together global thought leaders, legal experts, financial professionals, and stakeholders to discuss the latest trends, opportunities, and challenges in the insolvency and restructuring sectors. The event focused on both domestic and international perspectives on insolvency, with a special emphasis on India’s evolving framework under the Insolvency and Bankruptcy Code, 2016 (‘IBC’). The Conclave aimed to foster dialogue on best practices and innovative approaches, contributing to shaping future policies by integrating global insights into the Indian context.
The Conclave began with an inaugural session wherein the gathering was addressed by eminent guests namely, Mr M Rajeshwar Rao, Deputy Governor, Reserve Bank of India (Chief Guest), Mr Dinkar Venkatasubramanian, President, INSOL India, Dr Sonali Abeyratne, Technical Director, INSOL International, Mr Rajnish Kumar, Chairman of Mastercard, Former Chairman of State Bank of India (‘SBI’) and Mr Ravi Mital, Chairperson, IBBI.
In the welcome address by Mr Dinkar Venkatasubramanian, he remarked that over the last eight years, the banking system has improved and that there has been progress in this sphere. He mentioned that while India has a very strong insolvency system, it needs a larger, stronger, and more efficient ‘stressed asset’ ecosystem. Further, he shared a brief idea of the objectives of the conclave, and what it would entail. Lastly, he enlightened the audience about some key initiatives of INSOL India such as a focus group on operational turnaround, a special focus group on creditors, a study on the National Company Law Tribunal , and a ‘ten-year strategy refresh’.
Dr Sonali Abeyratne imparted a special address wherein she delved into the strategic review carried out by INSOL and the ideas for serving this community. She also gave a brief insight into what INSOL is, how it works, its members, events, as well as its future projects.
The gathering was then addressed by Mr Rajnish Kumar who elucidated the evolution of the insolvency and banking system while specifically referring to the state of affairs before and after the enforcement of the IBC. While sharing his experience as the chairman of SBI, he mentioned how the public refused to accept the IBC and that it was heavily litigated by promoters, creditors, along with other stakeholders. He also explained the role and responsibility of institutional creditors and the Committee of Creditors (‘COC’). Lastly, Mr Kumar highlighted the potential of technology for faster processing and the importance that IBC’s success holds for India.
Mr. Ravi Mital, in his special address, mentioned the range of projects and cases that the IBC has dealt with since its inception. Mr Mital delved into various aspects of the IBC including changes that the Code has had in creditor-debtor relationships as well as the adversarial nature of the admission process entailed therein. He mentioned that IBBI has previously made and will continue to develop regulations for reducing litigation and clarification, keeping in mind the harm caused by overregulation. Lastly, Mr. Mital elucidated various future projects such as the usage of technology, integration of mediation, creditor-led resolution process, and introduction of group insolvency.
“One thing is [to] use the law, but the other important thing is the fear of law”
– Mr. Ravi Mital
To conclude the inaugural session, the Chief Guest, Mr. M Rajeshwar Rao addressed the gathering and shared insights about the issues and challenges encountered by RBI in the last 8 years. Further, he mentioned that the present insolvency and bankruptcy regime as well as the Code are results of the recommendations of the Bankruptcy Law Reforms Committee, which were based on a few core principles of facilitating the assessment of the viability of the enterprise at an early stage, enabling symmetry of information between the creditors and debtors, ensuring a time-bound process to preserve economic value, respecting the rights of all creditors with clarity on priority, and ensuring finality of outcomes.
Mr. Rao also highlighted various issues that plague the system such as implementation issues, delays in meeting timelines, unsatisfactory recovery rates, delays in the initiation of the resolution process, etc. At the same time, he spoke about the positive changes brought by the IBC. He enlightened the gathering about some of the alternatives to the IBC mechanism such as RBI’s prudential framework for the resolution of stressed assets and the pre-packaged insolvency resolution process. Further, he delved into the central role of the COC, the issues faced by them, and the need for a code of conduct for them. Lastly, Mr. Rao highlighted the importance of feedback, data collection, and the use of technology in the IBC ecosystem.
“While the 2016 code remains a landmark legislation that has fundamentally altered the landscape of corporate practices in the country, the onus is on us to ensure that collectively we harness the potential of the code to create an enabling ecosystem that enables value preservation”.
-Mr M. Rajeshwar Rao
After the inaugural, the conclave began with the first panel on the topic “Issues, Recent Developments & New Trends in Restructuring & Insolvency Across Jurisdictions – Americas, Asia Pacific, Europe & India”. It was moderated by Mr Ashwin Bishnoi, Partner, Khaitan & Co., chaired by Mr Sumant Batra, President, Insolvency Law Academy, and consisted of four panellists namely, Mr Craig Martin, Partner, Global Co-Chair, Restructuring and Managing Partner, DLA Piper representing America; Mr Jose Carles, Managing Partner, CARLES | CUESTA, Spain representing Europe; Ms Lauren Tang, Managing Partner, Virtus Law, Stephenson Harwood representing Asia Pacific and Mr Debanshu Mukherjee; Co-Founder & Lead, Vidhi Centre for Legal Policy representing India.
Starting the discussion, Mr Ashwin Bishnoi introduced all the panellists and welcomed the audience.
Mr Sumant Batra, in his introductory speech, spoke about the unavoidability of global perspective in the field of insolvency, the global history of insolvency, and how geopolitics frames economic law and policies such as the change in the type of globalisation, demand for a review of the existing instruments, and the gravitational shift of economic power towards Asia with India as a dominant voice.
Speaking from the perspective of Asia Pacific, Ms Lauren Tang, shared her insights as a Singapore Insolvency and Restructuring lawyer. She highlighted three trends, which which are insolvency mediation, pre-packed schemes or restructuring, and set-offs allowed in liquidation. On the first point, she mentioned how mediation in the insolvency sphere came about in Singapore and shared her experiences from landmark Singaporean cases which she was a part of. She also highlighted two key features of mediation- trust and willingness to participate. On the second point, she shared that the pre-pack scheme was introduced in Singapore in 2017 with its first case being sanctioned in 2018 by the Court. The scheme cuts the process short by removing the need to go to Court to make a COC and getting votes for the plan in advance. She also mentioned the landmark case of Re No Va Land Investment Group Corporation1 which was the first case on a pre-pack scheme decided by the Singapore International Commercial Court. Concluding her speech she stated that in Singapore, only insolvency set-offs are allowed in liquidation.
Mr Ashwin thanked Ms Lauren and asked her what tools could be employed to avoid mediation being used as a delay tactic. Ms Lauren answered that two solutions can be sticking to a strict timetable and learning when to let go.
Taking over from Ms Lauren, Mr Craig Martin shared his insights on the topic from the American perspective. He began by speaking about pre-packaged bankruptcy being available in the US since the late 1970s. He briefly explained the three models of pre-packaged insolvency in the US: true pre-packaged bankruptcy; “straddle” pre-packaged bankruptcy; and pre-arranged bankruptcy cases. Further, he talked about some of the new tools and trends for insolvency solutions such as Small Business Cases/ Subchapter V which is a special provision for the bankruptcy of small businesses, private credit involvement in a distressed debt market, use of innovative financing structures to support restructuring efforts, and greater flexibility and speed in providing financing compared to traditional banks.
Regarding cross-border restructurings, Mr Martin spoke about the use of international protocols and cooperation agreements and the adoption of the UNCITRAL Model Law on Cross-Border Insolvency under Chapter 15 of the US Bankruptcy Code. Further, he mentioned the case studies of Epic! Creations; Think & Learn; and Byju’s Group to explain the intersection of the US and Indian Insolvency law. Lastly, he highlighted some challenges of cross-border insolvency cases such as different time zones, difficulty in sending notices, etc.
Bringing the European perspective to the table, Mr Jose Carles stated that in Spain pre-packs already exist however, in Europe they are yet to be used. He explained the two solutions under pre-packs in Spain; first, a two-step solution wherein a business goes to the Court for the appointment of an insolvency trustee and then for filing the insolvency proceedings, and second, the business finds a binding offer for the sale of their business and then apply for the proceedings without the appointment of any insolvency professional. Mr Carles briefly spoke about the European Restructuring Directive, which included pre-insolvency tools in all EU states, and the change that it has brought in Spain’s insolvency regime.
Moving onto the last speaker, Mr Debanshu Mukherjee shared the Indian perspective. He shared various statistics and explained their meaning. Starting his speech with the IBBI graph on admissions under IBC, he spoke about how and why there is a downward trend in these admissions. He shared another statistic from NCLT about cases filed and disposed of under Sections 7, 9, and 10 of the IBC and explained that the pendency is low for filings. He stated that 36 billion dollars have been recovered so far by Scheduled Commercial Banks under IBC Resolution Plans according to the RBI. He briefly explained the challenges faced by the system, such as the minimal success of the pre-pack law for small businesses, the non-implementation of personal insolvency law, the regime of cross-border insolvency being underdeveloped, and the market for rescue financing not taking off. Lastly, Mr Mukherjee spoke about the use of mediation in insolvency proceedings in India.
Concluding the discussion, Mr Sumant shared his concluding thoughts wherein he spoke about why the IBC was enacted, what it represented from a philosophical perspective, and the changes brought under IBC. He also briefly gave his opinion on all the challenges highlighted by Mr Mukherjee. Lastly, he explained how the global stage has changed because previously countries with less than 20% population would frame best practices and policies for the rest of the 80% of the population but now, out of this 80% population, countries like India are demanding a greater voice at the table. When countries that are economically significant today flex their economic voice and geopolitical muscle to ask for a greater voice, it would result in a demand for a relook at the policies and best practices framed in the last 30 years. In his opinion, this will shape the global thought leadership on insolvency in the coming 15-20 years.
“The laws are often enacted to solve the problem of a time but they also represent the philosophies of the nations that enact those laws as also the future visions that those countries might have for themselves”
-Mr Sumant Batra
“India as a country is like an elephant because of the weight it carries it often moves at a slow pace initially or sometimes even takes time to move. But once it moves then it can move beyond the speed which is often incomprehensible with the size and the weight it carries, and also when it moves the earth under it, shakes”.
-Mr Sumant Batra
After the first panel discussion, Mr Rana Ashutosh Kumar Singh, Managing Director, State Bank of India delivered a keynote address. He spoke about his experience as the head of the German operation of SBI for 5 years. He stated that in the last 8 years, the law, the processes, and the ecosystem of insolvency have developed phenomenally. Lastly, he gave some suggestions for improvement of the system to different stakeholders.
Following Mr Rana’s address, the Conclave proceeded with the next session on the topic of “Role of Investors in the Stressed Assets Ecosystem — Evolution, Challenges and Opportunities”. The panellists for this discussion were Mr Arjit Basu, Retd. Managing Director, State Bank of India; Mr Shantanu Nalavadi, Managing Director, India Resurgence Asset Management Business Pvt. Ltd.; and Mr Amit Agarwal, President & Head – Private Credit, Edelweiss Alternatives.
The session started with an address by Mr Arjit Basu wherein he talked about India’s relationship with investors and the evolution of the investment regime in India after the enactment of the IBC. He underscored the positive changes that took place in the entire ecosphere due to the enforcement of IBC. He also highlighted a few aspects where investors can play a positive role, and challenges brought up by them in the IBC ecosystem. Lastly, he mentioned areas where the process can be expedited, and concerns can be addressed in the IBC regime.
Following Mr Arjit’s speech, Mr Shantanu Nalavadi and Mr Amit Agarwal had a chat on the topic. Mr Shantanu spoke about what is private credit and how it works in the insolvency process, and then Mr Amit underscored the fulfilling journey of private credit in the last 7-8 years in India after the IBC. Adding to the chat, Mr Shantanu spoke about intense operational turnaround in such assets and how they are conducted. Mr Amit mentioned the key challenges faced by the acquirers- length of the timeline after a successful bid and good employees leaving the company or being poached by competitors. Speaking of the solutions, Mr Shantanu talked about what improvements need to be made in the process on the aspect of the judicial system. Further, they talked about the change in the credit culture, the progress of India in the foreign investor space, and pre-packs.
The third session moderated by Mr Anoop Rawat, Partner, Shardul Amarchand Mangaldas & Co, was on the topic of “Judgment Enforcement, Asset Recovery, and Personal Guarantees – their Treatment in Different Scenarios” and consisted of the session chair Ms Anita Shah Akella, Joint Secretary, Ministry of Corporate Affairs, Government of India;Mr Steven Kargman, Founder & President, Kargman Associates; Ms Amelia Tan, Counsel, Carey Olsen Singapore LLP; and Mr Wei Yang, Partner, Kirkland & Ellis, Hong Kong Moderator.
Ms Anita Shah gave her introductory remarks where she talked about how these three elements serve as critical pillars in the insolvency process and their status in India. She also mentioned the steps being taken by the Indian Government to address the issues and concerns of the process.
Mr Anoop spoke about the effectiveness of a judgment or moratorium domestically and cross-border. He posed a question to Ms Anita about a cross-border insolvency mechanism being provided for in India indirectly under the IBC. Ms Anita responded that Section 234 of the Code provides for a bilateral mechanism for insolvency and Section 235 grants the Court an ability to seek assistance in case a debtor’s assets are located abroad.
Taking over the floor, Ms Amelia Tan shared a few challenges in enforcing judgments cross-border but from her point of view as a practitioner of foreign insolvency proceedings in off-shore laws of the British Virgin Islands, Cayman Islands, and Bermuda, there are statutory provisions in place which can be used.
Adding on this same issue from the perspective of Hong Kong Mr Wei Yang stated that Hong Kong does not have a corporate rescue regime instead the insolvency proceedings are focused on winding up and the corporate rescue is done outside of the insolvency proceedings. He underscored that Hong Kong is a creditor-friendly regime. He also spoke about the real estate market collapse in China, audit issues, bad governance, and Hong Kong rules applying to Chinese companies.
Lastly, Mr Steven Kargman spoke about his experience with retrieval and prevention of the dissipation of assets. He stated that a big part of the problem is that a number of the larger emerging market getters are controlled by controlling shareholders who look at these companies as a personal piggybank, so asset recovery is not a focus. He underscored that generally, in restructuring, the companies do not have good corporate governance which can make them a fertile ground for asset dissipation and be harmful to the interests of creditors.
The fourth session moderated by Ms Pooja Mahajan, Managing Partner, Chandhiok & Mahajan, Advocates & Solicitors was on the topic “Role of Institutional Creditors in Corporate Resolution Across Jurisdictions” and consisted of Mr. Rajat Agrawal, Head Acquisition – Corporate & SME, Arcil Premier ARC; Mr R. Subramaniakumar, MD & CEO, RBL Bank and ex-Adm. for DHFL; Mr Ravi Subramanian Shankar, Partner, Kirkland & Ellis, United States; and Mr Shaun Langhorne, Partner, Clifford Chance, Singapore.
Ms Pooja Mahajan began the session by introducing the panellists and briefly spoke about the topic.
Starting the session by sharing his insights, Mr R. Subramaniakumar spoke about the essential role of institutional creditors and aligning different things between the committee of creditors. He also talked about the aspect of equity and the role of technology in the resolution process especially during Covid-19.
Mr. Rajat Agrawal spoke from his experience as a participant in multiple COCs and a banker. He stated that upholding the principles of the statutes is the foremost challenge, apart from that, other challenges are balancing various interests of different creditors within the committee, keeping your interest as a lender in mind, arriving at a timely decision, and deterioration of asset value due to not being able to implement the resolution plan speedily.
Discussing the stand in USA, Mr Ravi Subramanian Shankar spoke about the constitution of COCs which is a group of unsecured creditors and the role of a trustee. He stated that the role of institutional creditors depends on a case-by-case basis of where they sit in the capital structure.
Lastly, Mr Shaun Langhorne, from the perspective of Singapore stated that for the restructuring process, there is no statutory rule for the formation of COC, so creditors come together in an ad-hoc fashion and form groups such as a group of bondholders, one of bank lenders, etc. He agreed with Mr Ravi and stated that the role and operation of institutional creditors is to be seen on a case-by-case basis depending on their position in the capital structure and who they are for each company.
The last session moderated by Ms Smiti Tewari, Partner- Dispute Resolution & Advisory, Khaitan Legal Associates on the topic “Opportunities and Challenges for Resolution Applicants in the Indian Insolvency & Restructuring Space” was impanelled by Mr Hemant Kumar, Executive Director of Corporate Finance, Dalmia Bharat Group; and Mr Shailesh Apte, President, Group Head- M&A and Growth Strategy, Welspun World.
Ms Smiti Tewari initiated the session by briefly talking about the issue of timeline in a resolution process.
Thereafter, Mr Shailesh Apte spoke about the role of a Resolution Applicant (‘RA’) in the resolution process. He briefly delved into the three things that an RA needs to protect after submitting a successful bid, namely, deal certainty, protection of business assets, and the timely completion of the process, and the challenges therein. He stated that when RA is committing the value and there is a significant erosion in the value of an asset, the RA cannot amend the resolution plan or walk away but under extra-ordinary circumstances there needs to be some method where there is a level playing field created for the RA because otherwise they will have to enact an unviable plan.
Adding to the discussion, Mr Hemant Kumar stated that in case of delay in the successful implementation of the plan post-approval, there is no provision for when a material adverse or force majeure happens, so the RA would be in a fix. He stated that there are situations where based on a certain valuation, a bid was made, and when the RA took possession the heart of the asset was missing. Such situations deteriorate or dissipate an asset so there is a need for a mechanism where a timeline can be monitored post-approval. He added that another challenge is that the RA has to fight a timeless fight with the creditors to have the title of the asset even after the handing over of the asset.
The panel also discussed regulatory challenges, implementation struggles, and strengthening of the monitoring agency.
The conclave concluded with a vote of thanks delivered by Mr Kulwant Singh who not only thanked the audience, organizers, panellists, and sponsors but also briefly summarized all the discussions that took place in the conclave.
1. [2024] SGHC (I) 17
