Indian Perspective on Arbitrability of Insolvency Disputes: Intersection, Intervention and Interpretation for Synergy Among Both Regimes

Abstract

India is fast emerging as a vibrant economy committed to establishing itself as a business-friendly destination country. The current ranking in the World Economic Forum and various reforms to modify the Indian regulatory framework exhibit this trend. From ranking 142 in 2014 to 63 in 2019 in “ease of doing business”, the constant effort towards improving Indian business regulation by adopting best practices is observable. In this regard, the Indian laws on Insolvency, Bankruptcy and Arbitration provide swift insolvency resolution and better settlement of disputes outside the traditional and cumbersome court procedures. However, both law have several confrontational zones of overlapping that require emphasis. The focus and purpose of the paper are to analyze the interplay between arbitration and insolvency proceedings.

Further, the case analysis will highlight the legal position of courts and adjudicatory authorities about the conditions when both regimes can continue concurrently to protect the creditor dealing with an insolvent individual or body. The main idea is to strive and find ways to avoid a collision between the Insolvency and Bankruptcy Code 2016 (hereinafter IBC 2016) and Arbitration and Conciliation Act 1996 (hereinafter A&C Act 1996) with an appreciation of the applicability, interface, and issues regarding the arbitrability of insolvency proceedings. The paper qualitatively examined several judicial pronouncements relevant to different aspects of the A&C Act 1996 and IBC 2016. The results deduced from the case analysis suggest that the insolvency and arbitration overlap is inevitable due to grey areas and recommend that until the Indian jurisprudence matures, the arbitrability of insolvency disputes will continue. The paper will aid in devising precise and novel ways to balance diverse conflicts and devising novel ways to balance these conflicts to secure the best from both these regimes.