The Supreme Court's ruling on Friday upholding the constitutional validity of the Insolvency and Bankruptcy Code (IBC) has brought the much needed clarity over the corporate insolvency resolution process and will end all conflicts over its procedures, according to legal experts.
Bringing clarity over the IBC will help boost investors confidence and will help in quick revival of ailing companies, they said.
"Supreme Court's upholding of IBC will add necessary certainty by way of long term clarity for all stakeholders. It should significantly boost investor confidence, and effectively enhance participation," said Cyril Amarchand Mangaldas Managing Partner Cyril Shroff.
The Supreme Court Friday upheld the constitutional validity of the Insolvency and Bankruptcy Code (IBC) in its entirety.
According to Trilegal Partner Shankh Sengupta: "Upholding the constitutional validity of the Insolvency and Bankruptcy Code is laudable and a step in the right direction. The judgement will go a long way in ensuring quick revival of ailing companies through the IBC process and avoiding "corporate death by liquidation".
Khaitan & Co Partner Ashwin said: "These crucial course corrections and clarifications are important milestones in the journey of an economic legislation which has already come far and will go a long way in cementing the insolvency and bankruptcy code as a key economic reform in India which will facilitate upward mobility for India in the World Bank ease of doing business rankings."
Tyagi added: "Regarding section 29A, the Court may have put a close the Arcelor issue. Besides adjudicating on the above core issues, the Court also directed that Circuit Benches of the National Company Law Appellate Tribunal (NCLAT) be set-up within the coming 6 months."
Echoing views, Ashwin said: "In doing so the Supreme Court has read down Section 29A by requiring that the related parties bear connection to the bidder who does not meet the criteria of section 29A."
However, Sengupta said: "It needs to be seen how this would pan out practically."