Book Review- Emergence Of Commercial Justice Insolvency And Arbitration By Vivek Sood
Indian economy was often called a debtor's paradise and a creditor's hell till the Insolvency & Bankruptcy Code (IBC) 2016 came into being. While companies went bust over decades, the creditors and employees have been at the receiving end. Delays in insolvency resolution would often work in favour of the bankrupt entity where its management would stay in control of daily...
Indian economy was often called a debtor's paradise and a creditor's hell till the Insolvency & Bankruptcy Code (IBC) 2016 came into being. While companies went bust over decades, the creditors and employees have been at the receiving end. Delays in insolvency resolution would often work in favour of the bankrupt entity where its management would stay in control of daily operations. Liquidation would be an endless process. The regulator, Board of Industrial & Financial Reconstruction (BIFR), would lack tooth, leading to further delays.
The classic case of Swiss Ribbons Pvt Ltd versus Union of India paved way to our modern-day IBC. The Supreme Court soon adopted a proactive judicial approach, thus infusing life into the system. Nowadays, a bankrupt management can no longer hold control once a petition is admitted by the National Company Law Tribunal (NCLT).
Vivek Sood, Senior Advocate with the Supreme Court of India, has traced the arbitration procedure and how the law came into being in his recent book - Emergence of Commercial Justice Insolvency and Arbitration - published by Bloomsbury Professional India.
Sood explains in detail how the apex court went into the background of IBC to find that a completely new approach has been adopted to speed up the recovery of debt from defaulting companies. In the new approach there is a calm period, followed by a swift resolution process within 270 days, failing which initiation of liquidation has been made inevitable and mandatory.
He goes into detail on how the Supreme Court, through the years, has taken a futuristic approach making amendments to various sections and how International Bar Association (IBA) guidelines have inspired IBC. The role of the code is not merely limited to defaulting companies but to the vast real estate disputes where victims moved court for justice. The Insolvency Law Committee Report suggested amendments in IBC classifying real estate buyers are financial creditors.
The author goes on to explain the far-reaching ramifications that arose in a recent case where the meaning of the 'seat' of arbitration and its importance during proceedings came up, and how it was significant to determine the jurisdiction of the court over such proceedings.
The book delves into a case-by-case analogy to explain how amendments were made to improve commercial justice in the country. It is surely a handbook that needs to be consulted before taking any case. It's a lawyer's manual on insolvency and arbitration. As Sood rightly puts it – "We had only civil and criminal justice so far. The concept of commercial justice is fast emerging with IBC 2016 ready for its second innings post-pandemic moratorium.