Soft law, hard choices: Lessons from India's cross‐border insolvency protocols

Abstract The UNCITRAL Model Law on Cross‐Border Insolvency (Model Law) has been accepted as a solution to harmonize international insolvency practices. However, its limited adoption and inconsistent interpretation by the Courts have hindered its effectiveness. Amid the uncertainty, the use of contractual arrangements and the adoption of insolvency protocols have emerged as viable alternatives to address these gaps. India Inc., too, faces challenges due to a lack of statutory clarity under the Insolvency and Bankruptcy Code. While recent legislative proposals aim to incorporate substantive provisions on cross‐border insolvency, uncertainty persists over procedural aspects. Drawing from key cases such as Macfadyen & Co . and Jet Airways , the article highlights how contractual arrangements and court‐to‐court cooperation can facilitate innovative solutions despite the absence of a formal legal framework in India. The article argues for a balanced approach that retains procedural rigour while enabling flexibility to resolve complex cross‐border disputes by use of the inherent power of the court. By leveraging judicial creativity, India can develop a robust cross‐border insolvency regime that promotes cooperation, creditor protection, and economic efficiency. The paper concludes that the inherent jurisdiction of courts serves as a critical doctrinal tool in cross‐border insolvency, enabling the judiciary to facilitate cooperation in complex transnational disputes. Even with the prospective adoption of the Model Law, the inherent jurisdiction of courts will remain indispensable in resolving disputes involving jurisdictions that have yet to implement the Model Law.