Cross Border Insolvency denotes circumstances when a Corporate Debtor has one or more foreign assets or liabilities situated outside the country where it has been incorporated. When a Corporate Debtor has foreign assets or liabilities then not only the domestic insolvency laws apply to it but also the laws of the country in which it possesses the said assets or liabilities may apply to some extent. The term cross-border insolvency was introduced by the UNCITRAL when it issued a Cross-border Insolvency Model Law in the year 1997 to assist States in regulating corporate insolvency and financial distress involving companies that held assets or liabilities in more than one State. The purpose of UNCITRAL's Model Law on Cross-Border Insolvency was to promote cooperation between the Courts and other Competent Authorities of Foreign States in cases of cross-border insolvency.

Centre of Main Interest (COMI)

In cross-border insolvency, the Centre of Main Interest ('COMI') plays an important role as it is the factor that decides where the judicial proceedings for the insolvency resolution of the Corporate Debtor will be held and in case of concurrent proceedings, which proceeding will be held as the main proceeding. The term "Centre of Main Interest" is a legal term introduced in the UNCITRAL Model Law on Cross-Border Insolvency. The COMI of a Company or Corporate Debtor is the place where the company resides or carries out most of its functions. COMI should correspond to the place where the debtor conducts the administration of its interests on a regular basis and is, therefore, ascertainable by third parties. The place of a company's registered office shall, in the absence of proof to the contrary, be presumed to be the place where its COMI is located.

India introduced Insolvency and Bankruptcy Code ('IBC') in the year 2016 and since then it has been constantly evolving with statutory amendments and judicial interpretation but the cross-border insolvency aspect had initially not been touched upon. It is now that the Insolvency Law Committee (ILC) and the Cross-Border Insolvency Rules/Regulations Committee (CBIRC) are working on introducing cross-border insolvency laws and incorporating the same in the Insolvency and Bankruptcy Code. When talking about COMI for cross-border insolvency in India, there are certain issues that one might think of like how is COMI determined, what factors affect the determination of COMI, and what is the purpose of COMI.

Determination of a Corporate Debtor's COMI

When an application is made for the recognition of foreign insolvency proceedings, the Adjudicating Authority will be required to determine the Corporate Debtor's COMI.

The CBIRC noticed two recommendations on the issue of determination of a Corporate Debtor's COMI:

  1. Date to be taken into account for the determination of the corporate debtor's COMI.
  2. Factors to be considered in the determination of the corporate debtor's COMI.

Date to be taken into account for determination of COMI

The UNCITRAL Model Law on Cross-Border Insolvency has been silent on this issue. Different jurisdictions have different laws and have made different choices when it comes to selecting the date for determination of COMI (hereinafter "effective date"). CBIRC noted that there may be a significant time gap between the date on which foreign insolvency proceedings were instituted and the date on which application for its recognition was filed under IBC. It is possible that the corporate debtor might change the location of its operations or assets between this time period for changing its COMI. There are two choices available for deciding the appropriate effective date:

  1. Date on which the foreign insolvency proceedings were recognized.
  2. Date on which the application for the same is made.

CBIRC recommended that determining the effective date is important and must not be left for determination depending on the situation of each case. If the determination of effective date is left on the situations provided by each case it will not only complicate matters but will also be a waste of time and effort of not just one jurisdiction but multiple jurisdictions depending on the complexity of the case. The CBIRC, therefore, recommended that the rules to be issued by the Central Government must codify the date of commencement of the foreign proceeding in the relevant foreign country as the effective date for determination of COMI.

Factors to be considered in determination of COMI

The ILC recognized that several factors affected the determination of COMI. Some of them are:

  1. Presumption in favour of registered office: There is a rebuttable presumption in favour of treating the location of the registered office of the corporate debtor as the COMI.
  2. An identifiable place of Central Administration: If the above presumption at (1) is rebutted, the place where the Corporate Debtor's central administration takes place and which is readily ascertainable by third parties, including the creditors, is determined as the COMI. We refer to this as an 'identifiable place of central administration'.
  3. Other factors in delegated legislation: If it is not possible to ascertain the identifiable place of central administration, it has been recommended in the Report that the Adjudicating Authority must take into account the factors prescribed in the Rules to be framed by the Central Government, in the COMI determination exercise.

CBIRC, after reviewing the points given by ILC for determination of COMI, came to a decision and recommended that the hierarchy suggested by the ILC Report wherein other factors are to be considered only after an identifiable place of central administration is rebutted is inappropriate. Instead, CBIRC recommended that the other factors such as the location of the Corporate Debtor's assets, books of account, Directors and Senior Management, the Corporate Debtor's creditors etc shall be considered at par with the identifiable place of central administration and not to be considered on a standalone basis. The CBIRC, therefore, recommended dispensing with the proposed hierarchy and placing the identifiable place of central administration on the same footing as the other factors, for the purpose of the determination of COMI.

The other factors are often the basis on which the identifiable place of the central administration of the debtor is determined. Also, laws in jurisdictions such as the US, UK and Singapore have not provided such hierarchical test of sequence in which different factors are to be considered for the determination of COMI.

Important cases on determination of COMI

Zetta Jet Pte Ltd & Ors. (Asia Aviation Holdings Pte Ltd, intervener)1

In the case of Zetta Jet Pte Ltd & Ors. a bankruptcy proceeding was filed against its Californian subsidiary Zetta Jet USA, Inc. in the US Bankruptcy Court. The Singapore High Court granted an injunction on restraining Zetta Jet Singapore and other shareholders from taking any further steps about the bankruptcy filings in US Bankruptcy Court.

The US Bankruptcy Court ignored the injunction of the Singapore High Court and continued with the proceedings which then converted into liquidation proceedings under US laws under which a trustee was appointed who then commenced recognition proceedings in Singapore following the US Bankruptcy Court's authorization to do so.

On the recognition proceedings filed by the American trustee, the Singapore High Court took the view that the liquidation proceedings being held in the US were contrary to the public policy of Singapore and that its continuation was a breach of Singapore Injunction and undermined the administration of the justice of Singapore. Therefore, Singapore High Court refused the recognition requested by the trustee. Thereafter, the Zetta entities and the trustee applied again for the recognition of US proceedings under Singapore Model Law.

The trustee then argued that:

  1. Zetta Jet Singapore's COMI is in the US as at the time of filing of recognition application. Accordingly, the US proceedings should be recognized as a foreign main proceeding.
  2. Alternatively, Zetta Jet Singapore had an establishment in the US within the meaning of Article 2(d) of the Singapore Model Law the US proceedings may be recognized as a foreign non-main proceeding.

The Singapore High Court carefully analysed the whole scenario of the case and decided to determine the COMI for Zetta Jet Singapore. It was then presented with two decisions to be made:

  1. Relevant date for the determination of the debtor's COMI.
  2. Determination of the debtor's COMI and the approach to be taken for the same.

As for deciding the relevant date for determination of debtor's COMI, Singapore High Court had the choice to choose from any of the three approaches:

  1. English and European position: The date of commencement of the foreign insolvency proceedings.
  2. Australian position: The date of hearing of the recognition application
  3. US position: The date of filing of the recognition application.

The Singapore High Court after reviewing these approaches came to the decision of following the US approach for deciding the relevant date for determination of debtor's COMI. The Singapore High Court declined to follow the Australian approach because it left the date for determination of debtor's COMI uncertain. As for the English and European approach, the Court felt that it will cause unnecessary delay in the proceedings.

Now, for the determination of the debtor's COMI and the approach to be taken for the same, the Singapore High Court noticed various factors and displaced the presumption that Singapore was Zetta Jet Singapore's COMI. It was viewed that:

  1. All the management and direction for Zetta Jet Singapore were, at all material times being conducted from the US.
  2. The corporate representations showed that its base of operations was in the US; and
  3. A major portion of the company's creditors were located and operated in the US.

The court also noticed that since the company was in the business of aircraft rental and charter hence, it was only natural that its assets namely planes were in the US and was marked as incidental and not indicative of the location of its COMI.

Jet Airways (India) Ltd. Versus State Bank of India and Anr.

The Jet Airways was going through financial turbulence since 2018 with the company unable to pay its employees salaries as well as aircraft leasing charges. After failing to obtain any fundings for a year, an insolvency application was filed against it before the Mumbai Bench of NCLT. However, a month prior to this, the company was pushed into bankruptcy in the Netherlands. The trustee appointed by the Noord-Holland District Court, Trade, Sub-district and Insolvency after hearing of the Indian insolvency application approached the NCLT regarding the parallel proceeding for the same company. NCLT, however, declared the Dutch proceedings as a nullity in law due to the absence of cross-border insolvency mechanism in the existing IBC provisions in India.

Therefore, an appeal was filed to NCLAT which led the case into a whole new direction setting the Jet Airways Case as a precedent for introducing cross-border insolvency mechanism in India. The NCLAT sought an agreement between the Indian Resolution Professional and the Dutch Trustee to ensure cooperation and coordination of the two proceedings to achieve value maximisation of the insolvent company while the proceedings continued in parallel. This led to the emergence of a cross-border insolvency protocol between the two court-appointed officials, which was subsequently approved by the NCLAT. The COMI for Jet Airways was decided to be in India as the company is incorporated in India and the major operations for the company were directed through its head branch in India. The Jet airways case being India's first cross border insolvency case has set a ground for India's upcoming cross-border insolvency laws.


The Insolvency and Bankruptcy Code is still evolving in India. Cross-border insolvency is a major step towards the future of Insolvency and Bankruptcy in India. In this era of globalisation resulting in companies running businesses together in various countries, the need for cross-border insolvency is being felt much more.

Determining COMI is an important aspect where cross-border insolvency issues arise. Certainty and uniformity in approach while determining COMI would certainly lead to fast tracking the insolvency resolution process and eliminate delays while arriving at a decision on the issue of determining COMI. Certainty on determining the effective date will eliminate will further fast track the process. Therefore, uniformity and certainty in the insolvency resolution mechanism would be desirable to achieve speedy resolution of corporates involving cross-border issues.


1 [2019] 1 SGHC 53

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