Indian Courts Are Not Bound By Foreign Insolvency Judgments From Non-Reciprocating Countries: Calcutta High Court

The Calcutta High Court, in a recent decision by Justice Shampa Sarkar, ruled that Indian courts do not enforce moratorium orders from non-reciprocating countries like the U.S. without a comprehensive cross-border insolvency framework. This ruling came during a dispute between Uphealth Holdings and Dr. Syed Sabahat Azim over an arbitration clause in a Share Purchase Agreement. Uphealth, facing a bankruptcy proceeding in the U.S., sought to halt Indian court proceedings, citing the U.S. moratorium. The High Court clarified that while foreign proceedings can be considered, they are not binding without official recognition. The court underscored India's lack of a framework for cross-border insolvency under the IBC and upheld the trial court's decision, emphasizing that only orders from reciprocating countries are enforceable in India under Section 44-A of the CPC.