Legal Era Conducts its 7th Annual Insolvency Summit 2022 towards Nurturing the IBC Ecosystem and Addressing the Needs of New Age Markets

LEGAL ERA CONDUCTS ITS 7TH ANNUAL INSOLVENCY SUMMIT 2022 TOWARDS NURTURING THE IBC ECOSYSTEM AND ADDRESSING THE NEEDS OF NEW AGE MARKETS

Legal Era's 7th Annual Insolvency & Bankruptcy Summit 2022 held virtually on 14th October 2022 was a power-packed day-long gathering that addressed and shared perspectives and know-how on India's path-breaking economic legislation - the IBC. The Summit saw participants including decision-makers from the world of law and business, eminent experts, elite business lawyers, global thought leaders, and professionals from across geographies and domains apart from insolvency practitioners.

Legal Era has been associated with Insolvency law from the Code's inception. As well as the six Insolvency Summits hosted every year, Legal Era has been preparing statements and reports on the IBC and deliberating on them annually. This time too, the high-level conversations were on a range of new legal trends and developments in insolvency.

The Summit began with an Opening Plenary Address by Dr. T. K. Viswanathan, Chairman Bankruptcy Law Reforms Committee. He thanked Legal Era for the opportunity to defend the code time and again. Calling the Code a jewel in the Indian Statue Book and a historic law reform, he opined: "The relationship between law and social change is strong. And the IBC represents the current market realities in the financial sector. On the point of whether the law has failed to achieve its objective, the Standing Committee of Finance 32nd Report 2021 has made some recommendations that give the impression that the IBC is not achieving its stated objectives…But the IBC is futuristic in design. It can accommodate fast-changing technological developments. There is datafication of information. The SARFESI Act has been amended in 2016, landmark legislation in datafication. Big data is playing a role. For example, data on the impact of NCLT and NCLAT are available. Big data on the credit market is also available for IBC."

Dr. T. K. Viswanathan made a pertinent point highlighting the IBC today represents a transition between the old legal order and the new legal order. "We are in the middle of this transition. Once the backlog is cleared, the credit market will be restored. Since big data on the functioning of the code is available, it is steadily measurable. And the code is not recovery legislation. So, judging it based on the number of cases of liquidation is not correct. The code has come up very well. When the transition is over, it will one of the most important legislations the govt has framed and will form an example for law reforms ahead. This law is constantly monitored by the govt standing committees. I have great faith in the law."

Assuring Dr. T. K. Viswanathan that he didn't need to defend the Code and that the Code fulfilled its purpose, Mr. Ravi Mittal, Chairperson IBBI opined in his Keynote Address, "The government and the regulator IBBI are keeping pace with the market. In the last year itself, it made more than 20 amendments. The IBC has helped the banks in solving the NPA problem since 2016. Out of over 12 lakh crore NPAs, over 2.5 lakhs crores NPAs have been resolved. And another 2.5 lakh NPAs have been withdrawn. This shows the code has changed the debtor relationship. This is the most important thing that the code has done."

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Mr. Ravi Mittal went on to share a couple of behavioural changes on how to implement the insolvency law: "

1. Come to IBC as early as possible. Resolve the matter earlier, so that more value is realized. If you bring the case late into IBC, it will not be possible for IBC to recover the value that was lost before the case came to IBC.

2. IBC prescribes that the case be admitted in 14 days. How is that possible? Only if we accept that it is non-adversarial legislation. See only if the default has been done in the limitation period and admit it. To do this, we need a change in behaviour from the legal representatives – do not seek adjournments. What is the amount of the default – this question should be addressed at the claims stage and not at the admission stage."

3. We need to think about an alternate arrangement to ensure that once a case is admitted into the IBC, we adhere to the time limit of 180 days to resolve it. There are multiple kinds of disputes. So, can we devise a system where disputes that are not related to the resolution applicant can settle separately – but when the resolution applicant has given that the bid is accepted by the COC, can we then allow the resolution applicant to start functioning the unit?

4. Western countries have a huge pre-insolvency system. Before the case goes to the insolvency system, they resolve the matter via mediation. Is there a need to set up a guideline that the creditors can use to resolve the case before it comes to the IBC?

5. There is a need to change the behaviour of creditors in the committee of creditors. If you take decisions fast, less value will be lost. And if you keep fighting amongst yourself over small claims, then the pie to share will be smaller and smaller. Keep the pie large enough to be shared with all. The objective of this code is not recovery but to resolve. The entity under insolvency should survive as a going concern – it will help the economy by generating more taxes, GDP, etc. So, this will help the country more. And this is what creditors need to understand. And work with this mindset.

In his concluding thoughts, Mr. Ravi Mittal summed up three points essential to implement the law in its true spirit. "First, reduce delays as much as possible, delay leads to erosion of value. Second, maximize the value. Conserve the value, everyone will be happy. Third, don't look at haircuts just based on banks or financial creditors. See it at the fair value at which the case comes to IBC."

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This was followed by a Special Address by Mr. Shardul Shroff, Executive Chairman Shardul Amarchand Mangaldas & Co. who highlighted concerns that needed urgent attention and would help to improve the legal practice around IBC. "There were 4 fundamental concerns that IBC sought to address when it was conceptualized. One, reorganization and insolvency resolution have to be done in a time bound manner for maximization of the value including alteration of the order of priority of payment of govt dues. Two, the process has to be decided based on commercial principles. Decide matters with the expedition. Else equity has lost its right to control the asset once its value has eroded. Three, creditors must be put in charge of resolving insolvency. From debtor in possession to creditor in control. There is a good justification for this model. And four, only sick companies know sick promoters. Section 29 has drastically changed this perception."

Mr. Shardul Shroff continued to speak about the diverse positive features of the IBC ecosystem. "The code has created a class of regulated persons – insolvency professionals – who play a key role in the insolvency, liquidation, and bankruptcy process. An electronic database is created to eliminate delays and disputes about facts when disputes take place. Which authority has the power according to the value of the case – that is also solved with the adjudicating authorities. NCLT and NCLAT. There is a very active regulatory auth the IBBI which has oversight over the processes and professionals under the code gives a robust IBC."

All the same, Mr. Shroff critiqued the Rainbow Papers' judgment and passionately urged the need to bring an amendment. "Rainbow papers case has many more ramifications which will be raised in restoring the IBC to its original objective – the object is the revival in the expectation that a viable result will be achievement resulting in generally improving the Indian economic growth. One of the largest where dues are pending is government dues. Now government claims were never intended to be the top priority. These were fifth in priority in the code. That has been changed based on the may/ shall interpretation. There is no disbursement in case of govt dues – so how can it classify as a financial creditor – there is no security interest also created. The law has not created rights for statutory creditors. The intention behind the IBC is to protect the rights of financial creditors and operational creditors. So, all of us together need to urgently bring an amendment and clarify that there is a mistaken impression in Vidarbha and Rainbow Papers. Unfortunately, even the review has been dismissed. Else it is negative reform. A positive aspect of the IBC has become a negative aspect. The priorities have been changed. The govt now out of the blue stands in the same category of workmen etc."

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The three addresses made way for the first-panel discussion on the Role of COC as a key stakeholder under the IBC.

The panelists were Mr. Rajbeer Sachdeva, President, Group Legal, JK Organisation; Ms. Veena Sivaramakrishnan, Partner Shardul Amarchand Mangaldas & Co.; Dr. Mamta Binani, President (2016) of The Institute of Company Secretaries of India & Advocate & India's First Regd. Insolvency Professional; Mr. Aswini Sahoo, Executive Vice President & Chief Investment Officer Asset Reconstruction Company (India) Limited; and Mr. Sanjeev Pandey, Consultant & Former, Deputy General Manager (NCLT & Policy), State Bank of India.

Mr. Ajay Shaw, Partner, DSK Legal moderated the discussion capturing sub-topics such as the need for a code of conduct for the COC, recovery vs. resolution, and could commercial wisdom be allowed to disregard commercial bargains and extinguish pre-existing rights of dissenting creditors.

Mr. Rajbeer Sachdeva, President, of Group Legal, JK Organisation made a compelling case for a check on the COC. "CoC has the complete responsibility to decide all matters critical to the functioning of the Corporate Debtors. COC has wide powers. The decision by the COC is subject to limited judicial review. One cannot interfere with the merits or commercial decisions of the COC. In Singapore and the UK jurisprudence, there have been decisions where the challenge is made when there has been misfeasance by the … In India, the COC decisions have not been intervened. I am yet to see a judgment by the Supreme Court that yes, a decision by COC was bad in principle and did not apply the law. Even in cases where a technical objection has been raised against the COC's decision, the court has not entertained the objection.

Also, when banks and financial institutions file their application against corporate debtors, they want recovery. The amount that can be recovered from the stressed asset - is the motivating factor. Banks keep taking opinions from law firms on the best way to recover the amount. If nothing happens, then go to IBC."

Ms. Veena Sivaramakrishnan, Partner Shardul Amarchand Mangaldas & Co. opined that any sort of overregulation is counterproductive. "When we talk about a Code of Conduct it is more like a good practice and moral and ethical principles. I don't think there is a need for a written rule for the Company of Creditors. The resolution professionals, the creditors - need to be able to exercise and behave professionally and not necessarily have a set of rules to govern their behaviour.

Also, in the first 3 years of IBC, we always said that the objective is resolution and not recovery. But over time, it's a hard realization that the creditors need to recover their money. So, it is just not possible to have any resolution other than recovery when you have put COC as the most important stakeholder. There cannot be a resolution without recovery. No creditor will approve a plan which gives him nothing but resolves it. Recovery is an inherent part of IBC. All the same, dissenting creditors and their rights and discrimination against them must be addressed. Unsecured creditors' interests cannot be allowed to be cramped down."

Mr. Aswini Sahoo, Executive Vice President & Chief Investment Officer of Asset Reconstruction Company (India) Limited agreed that an evolving framework should not be over-regulated. "Else we get dragged by the process. Things don't get closed in time. So don't give ammunition to people by making the COC a prescriptive flavour.

And when we sit for strategy-making on resolving a case, we list down the priority steps so that we can maximize the recovery. We cannot look at resolution in isolation. Mid to small value cases it is extremely difficult to resolve."

Mr. Sanjeev Pandey, Consultant & Former, Deputy General Manager (NCLT & Policy), State Bank of India also agreed, "You need some kind of code of conduct that puts everyone in the same place and asks them to behave professionally, but yes, putting it into law will be counter-productive.

Also, when you sit in the COC, the driving point is recovery. But now we are in the 7th year of IBC. Banks earlier were only about recovery under IBC. Today, gradually, we can scrutinize and see where my best interest lies. I have the option of settlement today out of court. We have a recovery suit option. Then there is SARFESI and then there is IBC. Strive for a better dissolution, you get recovery and resolution."

Dr. Mamta Binani, President (2016) of The Institute of Company Secretaries of India & Advocate & India's First Regd Insolvency Professional opined that even in insolvency, there is a race between restitution, resurrection, and recovery. "We are all in the game of building up the economy. In liquidation, only the waterfall mechanism comes in. But what is happening is that when the resolution plan is crafted it seems like it's working towards liquidation and that needs to be corrected. We have to ensure everyone gets a share of the pie. How is it that you have thought over the distribution? That is important. The commercial wisdom is under check when it's a matter of distribution. Discrimination is made on the distribution/ allocation of the resolution plan fund – the security interest factor versus the voting factor. It has to be a responsible act – by application of mind. The secured financial creditors should not be allowed to come and play in an empty field."

Mr. Ajay Shaw, Partner, DSK Legal concluded the session urging COC to work towards a resolution that brings recovery – keep a corporate debtor as a going concern. Commercial wisdom must stay in the hands of those who understand the matter being the COC. And in sync with the Panel's views, he agreed that the Code of Conduct should not be formed to challenge a resolution plan. Else we're opening a pandora's box.

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The Summit moved to the next panel discussion on Financial Service Providers and the IBC. The sub-topics included the question of dealing with loan assets of FSPs, dealing with third party assets of FSPs, rescue financing and the increasing role of alternative and strategic capital providers in distressed situations, and pre-packaged schemes of arrangement.

The panellists were Mr. Sumit Khanna, Partner and National Head of Corporate Finance and Restructuring, Deloitte; Mr. David Chew, Partner & Founder, DHC Capital; Mr. Prashanth Venkatesh, Managing Director and Head of Credit Structuring, Broad Peak Investment Advisers Pte Ltd; and Mr. Devesh Malviya, Director & Head Credit Sales - Distressed, Loans & Structured Credit Deutsche Bank. The discussion was moderated by Mr. Anoop Rawat, Partner Shardul Amarchand Mangaldas & Co.

The panel talked about how the FSP rules have been brought in as an interim measure. Mr. Sumit Khanna, Partner and National Head of Corporate Finance and Restructuring, Deloitte urged the need to find an alternate mechanism for frequent admission of NBFCs and highlighted the time value of money. He also shared the pain point of judicial overreach, especially on the approval of a resolution plan. "Too many regulations have come and are tying us up in knots. We are overregulating as there has been overindulgence by the courts and hence the code is not panning out the way it was intended."

Mr. David Chew, Partner & Founder, DHC Capital asserted that "Without certainty, investors will be wary."

Mr. Prashanth Venkatesh, Managing Director and Head of Credit Structuring, Broad Peak Investment Advisers Pte Ltd talked about the exacerbated effect of the time value of money. "There is a need to move quicker."

Similarly, Mr. Devesh Malviya, Director & Head, Credit Sales - Distressed, Loans & Structured Credit Deutsche Bank opined, "These transactions get impacted by the delay of applications with the regulator. Different kinds o legal entities are involved in the ecosystem. There is a need for quicker and more comprehensive arrangement upfront. Also, the Supreme court revisiting the resolution plan makes it very hard to attract any kind of funding in this sector. It makes the process tardy and lengthy."

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The third Panel Discussion focussed on Cross-Border Insolvency Framework being a gold mine of opportunities for the legal industry and the country's economy.

The panellists were Mr. Ashish Chhawchharia, Partner & Head - Restructuring Services Grant Thornton Bharat; Mr. Bahram N. Vakil, Co-Founder, AZB & Partners.; Ms. Joanne Collett, Partner, Walkers; and Mr. James H.M. Sprayregen, Partner Kirkland & Ellis LLP.

Mr. Shardul Shroff moderated the discussion and raised two pertinent questions.

"One, if the processes have to synchronize on cross-border insolvency, is there scope to overcome the domestic delay process because of litigants disrupting the processes time and again by challenging every order before courts?

And two, if the Tribunal takes a view that the matter is against public policy, the Tribunal can oust the IBC/ negate the law. And that would happen amid the proceeding and that too by a quasi-judicial authority. That is a problem area that India has to address beforehand else there will be chaos."

Dr. T. K. Viswanathan, Chairman Bankruptcy Law Reforms Committee, joined in to agree and second Mr. Shroff. "We cannot displace the IBC. And we have to do the model law application quickly."

Mr. Ashish Chhawchharia, Partner & Head - Restructuring Services Grant Thornton Bharat made a case for the application of the Model Law in India. "We got the resolution in the Jet case. It was contentious to start with. The Dutch and Indian administrators respected each other's authority and worked together. But practically the amount of time it took – there were so many issues – it would help to have some framework. No two cases are similar. But some basic framework via the model Law will help the entire insolvency ecosystem in India. Not every time we can achieve this kind of outcome like in the case of Jet. Adopting a cross-border insolvency framework/ legal ability – that itself will be very helpful. It will save time and cost, especially in cases where the body is in India but the funds have created assets outside.

Also, we need to educate the whole system – lawyers, insolvency professionals, and judges take assistance from international lawyers and judges. This is important. Just enacting the law will not be enough."

Mr. Bahram N. Vakil, Co-Founder, AZB & Partners, also highlighted that while we resolved the Jet Airways case in the absence of a domestic cross-border insolvency law were while the NCLT took a technical narrow reading, thankfully the NCLAT took a broader and practical view which allowed us to go ahead with the protocol, "The Dutch administrators and our side had mutual respect. We did well in the circumstances sans legalese. But fingers crossed – I hope the model Law comes through in the letter. Also, we should have a specialized tribunal and specialized judges for phase 2 of IBC. Just like Singapore has led the way in arbitration, we should push for a specialized tribunal strongly."

Mr. James H.M. Sprayregen, Partner Kirkland & Ellis LLP talked about the UNCITRAL Model law. Only 30 countries have adopted the Model Law thus far, it will take a while to get the Model Law updated. On the question of whether it be helpful to have an insolvency protocol, he mentioned that having standards and guidelines would be a good thing. "Standards not Protocol as I don't want to be prescriptive. And what's been developed internationally, that will need to be contoured and massaged to meet India's needs because of unique social, cultural, and political considerations."

While Mr. James agreed that Lehman is not a poster boy for Model Law working and that there could have been a lot more cooperation between the practitioners and judiciary across borders, it was a vast improvement over not having a model law altogether. The trust factor, ability to work together, and reservoir of goodwill – this is necessary between the practitioners. Also, Insol was a great practice where the judiciary comes together to understand and discuss best practices."

Mr. James made a categorical case that the public policy exception should not swallow the rule. It will diminish the value of enacting the Model Law itself. He explained, "Some countries use the word manifestly against public policy. Others drop out that word. Best to leave it to the judiciary to decide what is public policy and what is in its interest. The right to appeal is always there as a protection mechanism against the conflicting understanding of different Tribunals on what is public policy."

Applauding India for moving forward with applying the Model Law, Mr. James urged the panellists to keep at it as good is better than perfect.

Ms. Joanne Collett, Partner, Walkers highlighted the need for a cross-border insolvency framework. She opined, "Every case we do involves some sort of cross-border element. Always see an offshore company at the top and then down finally to the mainland where the operating asset is based. So, there are a lot of benefits of a cross-border insolvency framework. Local creditors see that the company has operations in multiple jurisdictions. So, it's better to have one bankruptcy proceeding and everybody is bound by that proceeding. We are living in a global world. Going forward, we will see a lot of corporate cross-border complexities, fraud, and asset tracing – we need to have the model law in place. It is very beneficial as it gives everyone the rules of the road. And the foreign practitioner will get assistance on how to move forward in the Indian jurisdiction.

Also, there should be a public policy exception. But it should be narrow. Else it'll go against the very point of the model law."

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The fourth-panel discussion was on the subject of Mediation under the Code. That included brainstorming the scope of using mediation under the Code, pre-commencement mediation, legislative changes required to adopt mediation under the Code, and the unique challenges in using mediation under the Code.

Ms. Avlokita Rajvi from Shardul Amarchand Mangaldas & Co. moderated the session on behalf of Tejas Karia, Partner, Shardul Amarchand Mangaldas & Co. The panellists were Dr. T. K. Viswanathan, Chairman, Bankruptcy Law Reforms Committee; Mr. Sandeep Bajaj, Founder & Managing Partner, PSL Advocates and Solicitors; and Mr. Vijayendra Pratap Singh, Partner, AZB & Partners.

Dr. T. K. Viswanathan, Chairman, Bankruptcy Law Reforms Committee opened the session on an optimistic note that the costs and time factor were the main advantage of mediation over other forms. He highlighted, "Operational creditors is where mediation can play a very crucial role. Apart from the corporate insolvency process, personal insolvency is another area where mediation can play a big row. No one wants to be dragged to court for an issue that they weren't aware of. Mediation works in individual insolvency. I'm not for mandatory preference for mediation for corporate insolvency process as it will not affect reducing the backlog of cases."

Mr. Vijayendra Pratap Singh, Partner AZB & Partners also added valuable thoughts that the IBC section 12A facilitates mediation without calling it out as mediation. He made a compelling case for mediation under IBC. "A mediation-based paradigm fits very well with the IBC. It's non-adversarial like IBC. And you will also have the ability of the COC of using the COC meeting to look at and hold on to things. So, you have a say in what you want to get and you have a part in the solution that you want and you can decide what you want to keep. We need to cut down the number of cases that go to the Bench and that's where mediation comes into the picture too. The deterrent to the debtor is a lot more here than it is under the Commercial Courts act. After the COC is set up and before the EOI is sent out, you can give a chance for mediation. This would be similar to collective bargaining in the US."

Mr. Tejas Karia, Partner, Shardul Amarchand Mangaldas & Co. opined, "Mediation can be the best way to resolve cross border insolvency disputes. India is trying to bring it in the mediation bill which makes cross-border insolvency amenable to mediation."

Mr. Sandeep Bajaj, Founder & Managing Partner, PSL Advocates, and Solicitors offered fresh nuances. "Mediation Act does not provide for insolvency. And insolvency does not provide for the pre-insolvency mediation process. Yet in the case of operational creditors, 30-40% of disputes have been resolved. We have to see whether mediation will be helpful by the delay of another 2-3 months of mediation. Like in the case of the Commercial Courts Act it hasn't been helpful. The challenge is that – this is a special law where a lot of expertise is required. So trained mediators are required else the whole purpose will be defeated."

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The final and fifth-Panel Discussion was on the trends and challenges surrounding group insolvency. The panellists discussed how the jurisprudence evolved, group Insolvency of real estate companies-Project wise CIRP, and the treatment of cross-collaterals and corporate guarantors and its effect on infrastructure financing.

Ms. Misha, Partner Shardul Amarchand Mangaldas & Co. moderated the discussion. The panellists were Mr. Rajiv Dutta, Senior Advocate, Supreme Court of India; Mr. Siddharth Srivastava, Partner, Khaitan & Co; Dr. Ashok Haldia, Chairman IIPA of ICAI, and Mr. Pulkit Gupta Partner Ernst & Young.

Mr. Rajiv Dutta, Senior Advocate, Supreme Court of India, began by clarifying that it was not the first time that the courts have gotten into something that was developed by them...constitutional courts in the country have been exercising their jurisdiction to develop different types of law. Like the environmental law. He went on the highlight the need and latest trends in group insolvency. "We are aware that there is increasing consolidation of companies in India. And the theme of the Code is to resolve disputes between creditors and debtors. But at that time they did not include in it group insolvency. And now over the years, there is a need felt for it. It was at the adjudicatory level itself – that we see the process began of consolidating disputes and situations. Also, lifting the corporate veil – was done sparingly. But today, we are all aware – Videocon – Unitech – where the SC has dealt with these issues, consolidated, and it was felt these companies were interdependent and interrelated cos – and hence lifting the veil. So, the intent was the maximization of value. That is better so that workload and timeframe are better and people don't have to rush from one place to another. The key is the approach to resolving disputes. Also, what is happening more is liquidation and not resolutions. We have to do something to move further in the latter direction. Also, we need to make the Tribunals effective. It is emerging that there are a lot of backlogs accumulating in these tribunals. What is imp is we must consolidate the law on group insolvency. If we just leave it to the courts, then every case will have to painfully go up to the SC."

While applauding the Courts or taking a positive attitude towards group insolvency, Mr. Rajiv Dutta made a pertinent observation. "But here, this is not a law that was framing. It's not child's play. It is the whole economy that depends on it. The drafting for group insolvency has to be very different and careful. We have to adhere only to commercial wisdom and cannot be solely dependent on the legal wisdom of courts. For example, in the case of Air India, commercial wisdom came into play. Someone saved it while it was in debt and found a way. The legislation has to be – in line with procedural coordination. The definition of the corporate group itself is a complex affair."

Pulkit Gupta, Partner, Ernst & Young caught the nerve of the discussion. "There is a common consensus that we need a legal framework. Sonner, we do better than it is. With cross-border insolvency matters and with a large number of consolidations happening. At the same time, as we work through the issues - group insolvency is not easy. Creditors are anyways fighting even in the individual case. Putting 5-6 COCs together will be a substantial-high stake in value matter. Avoidance transactions are always with a related party. And in group insolvency, how will you deal with these transactions within a group? There are many practical challenges because of which it will be used only on an exception basis. Even in the US, there is legislation but it is used sparingly. Substantive consolidation involves heavy complexities."

Dr. Ashok Haldia, Chairman IIPA of ICAI agreed, "Some legislation is necessary. No one is getting into business single-handedly; everyone has a lot of subsidiaries. But lots of practical challenges. Procedural coordination will be needed."

Mr. Siddharth Srivastava, Partner, Khaitan & Co similarly highlighted practical issues with group insolvency. "There is absolutely no consensus when you ask for/ initiate group insolvency before the NCT. Practical issues. Lenders don't want it. Yet, a legislative framework is necessary. But group insolvency has to be an exception and not a rule as it is very difficult to achieve that in practice. So, we have to be cautious about substantive consolidation. We have to first have all the mechanisms in place whether on procedural or on substantive aspects."

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As a closing note, Justice Arjan Kumar Sikri, Former Judge Supreme Court of India, joined in and shared his comprehensive thoughts on the role of mediation and arbitration in furthering the intent of IBC. Justice Sikri opined: "Mediation and how it is necessary for insolvency cases. Started in 1999 with the insertion of section 89, today everybody knows the importance of mediation. But – very interestingly – when it comes to court cases-today it is believed that while initially it was started to release the court's burden today mediation is seen as the best form of access to justice. The resolution which is achieved via negotiations can be far better than the decision of the court in an adjudicatory process. So, it became an alternative to the court's system.

In insolvency matters, mediation can play a very important role in protecting interests. Promoters would like to ensure that the petition does not go out of their hands. On the other hand, the creditors who want their payable dues to be paid to them, want to salvage as much as possible. And haircut is as less as possible. So insolvency and mediation take a prime seat.

During covid, many companies went bust. It was a herculean task for NCLT to adhere to timelines. Mediation will save time, and money and ensure confidentiality, and can bring out of box solutions, and can be financially beneficial for all.

There are many advantages of arbitration. But sometimes the resolution that comes out of arbitral proceedings may not be acceptable to the parties. But most of the institutions have come out with a hybrid system by introducing mediation into arbitration. Med-arb or arb-med.

So, mediation has strengthened arbitration. Mediation does not only bring resolution via settlements but has become inevitable for the judicial system and arbitration.

We need to take a feminist approach to maintain business relations which is essential in the context of insolvency. Prioritization of claims, at what stage should be done, etc. An attempt has to be made to save the company. Liquidation only at the second stage.

On the legal provisions, we are in the process of passing a Mediation Act itself. The Bill is at the final stage. That is important particularly after India has become a signatory to the Singapore Convention. And the Bill to cover cross border disputes also is pending."

This 7th Annual Insolvency Summit 2022 was sponsored by Shardul Amarchand Mangaldas & Co, P&A Law Offices, DSK Legal, and Khaitan & Co. It was organized by the Legal Era Corporate Counsel Community and the Legal Era Global Business Lawyers Network.

Without a doubt, the IBC holds the key to the Indian Economy, Industry, and Growth, more so in the current digitalized, interdependent, and connected world. And the fast-evolving roles of the ecosystem of insolvency stakeholders have made Legal Era's Insolvency Summit more relevant than ever. Added to that is the Government of India's will to make India an even more attractive investment destination with a model law on cross-border insolvency on the last lap.

Kudos to Legal Era for propelling well-informed, pertinent discussions, carving out the challenges, addressing the needs of new-age markets, and suggesting the perspectives and recommendations arising from the Summit to the Insolvency and Bankruptcy Board of India and the Legislature.