A jurisdictional comparison of the twin peaks model of financial regulation

Cross‐border insolvency law in India: Are the principles of comity of courts and inherent common law jurisdiction relevant?

“…21 However, the reasoning adopted by the Court remains unclear, as is the basis for recognising such a power. 22 Later cases have demonstrated that the underlying basis for assisting a foreign insolvency proceeding has been on the basis of the principle of comity. 23 However, the exercise of the power is also motivated by other imperatives.…”

“…The doctrine operates as a restraint on common law courts to exercise jurisdiction when it determines that it is an ancillary forum for the purposes of insolvency proceedings and only a foreign court will be able to exercise jurisdiction in an effective manner. 28 The doctrine can also be considered to be an extension of the principle of universalism as: '[t]he most obvious and immediate purpose of an ancillary winding up is to secure assets within the jurisdiction of the… court and to prevent 'two "full" liquidations… [that] may well result in not only increased costs but also disparity between the creditors in each country.' 29 The principle of comity is well recognised in India.…”

“…'will be applicable where a local court determines that it is the "ancillary" jurisdiction for the purposes of an insolvency, and that a foreign court is the appropriate forum to conduct the principal proceedings.' 36 The place for the principal proceedings will normally be the place of incorporation of the corporate debtor unless there is clear and convincing evidence to the contrary. 37 Domestic considerations may also have a role to play in the development of the doctrine.…”

“…For instance, the ring-fencing provisions under Singapore domestic law that require debts incurred in Singapore to have priority over above all others, irrespective of whether insolvency proceedings in Singapore are deemed 'ancillary'. 38 Prior to implementation of the UNCITRAL Model Law on Cross Border Insolvency in Singapore, the Singapore High Court had allowed remittal of assets to a foreign liquidator on the condition that the preferential debts and debts incurred in Singapore would be paid before remitting the surplus out of Singapore. 39 This position was reversed by the Court of Appeal on the ground that ring-fencing provisions were inapplicable to an unregistered foreign company that did not carry on any business in Singapore.…”

“…However, if the Indian Courts consider themselves to be bound by the domestic regime, irrespective of the global nature of the insolvency proceedings, the utility of the inherent power under the common law will be significantly diluted. 46 The cardinal principle is that the relief sought by the foreign representative must have some basis in law; that is, it must be available under India's domestic laws or at least in the country where the main proceedings are being conducted. 47 It has been said that the court at the situs of the principal liquidation must ignore trivial outcome differences in pursuit of aggregate welfare benefits over time.…”