ABSTRACT
The adjudication of the Jet Airways insolvency marked a pivotal juncture in the jurisprudence of the Indian Insolvency and Bankruptcy Code (IBC), 2016 foregrounding the perennial contestations surrounding forum shopping within insolvency proceedings. This research delves into the evolving landscape of jurisdictional claims and judicial determinations that have reconfigured the ‘geography’ of Indian bankruptcy law post-Jet Airways. The case crystallized the tension between the legal doctrines of ‘registered office’ and ‘principal place of business’ as criteria for venue selection, exposing vulnerabilities in the statutory and regulatory framework that invite strategic forum manipulation. Through an incisive doctrinal analysis, this research maps emergent patterns of forum shopping, highlighting the ascendancy of certain National Company Law Tribunal (NCLT) benches and the attendant implications for procedural efficiency, creditor-debtor dynamics, and equitable insolvency resolution. The research situates the discourse within the broader constitutional and legislative mandates underpinning the IBC, interrogating how judicial pronouncements have both mitigated and inadvertently exacerbated jurisdictional fragmentation. It further explores the policy dilemmas engendered by forum shopping, ranging from delay and increased litigation costs to risks of jurisdictional arbitrage, while assessing the efficacy of recent reforms and institutional interventions by the Insolvency and Bankruptcy Board of India (IBBI) and the Supreme Court. By juxtaposing comparative insolvency regimes, the article advocates for a calibrated recalibration of jurisdictional rules and procedural safeguards to forestall forum shopping without undermining the IBC’s foundational objectives of timely, transparent, and commercially efficacious resolutions.
Keywords: Forum Shopping, IBC, 2016, Jet Airways Case, NCLT, Insolvency Jurisprudence, Insolvency Resolution, Creditor-Debtor Dynamics.
INTRODUCTION
The insolvency proceedings initiated against Jet Airways (India) Limited represented a pivotal juncture in the evolution of Indian insolvency jurisprudence, illuminating systemic fissures within the interpretative and structural underpinnings of the IBC, 2016. The case, emblematic of the financial demise of a once-dominant aviation enterprise, transcended mere economic distress to expose entrenched ambiguities in the spatial and functional demarcation of adjudicatory forums under the IBC regime. Central to the controversy was the jurisdictional tug-of-war that ensued between the NCLT, benches situated at Mumbai and Ahmedabad, both asserting competence over the matter, thus triggering a jurisprudential impasse over the determination of the appropriate ‘seat’ for insolvency adjudication. This contest laid bare the lack of a codified, hierarchical protocol to resolve such jurisdictional conflicts, giving rise to profound implications for the doctrinal coherence and operational efficiency of India’s insolvency architecture.[1]
The Jet Airways litigation did not merely reveal administrative inefficiencies or procedural missteps; it underscored a fundamental lacuna in the IBC’s institutional design—namely, the absence of a unifying legal framework to guide the allocation and assumption of jurisdiction among spatially dispersed NCLT benches. This vacuum facilitated an opportunistic exploitation of jurisdictional uncertainties by stakeholders, culminating in a disconcerting pattern of forum shopping that directly contravenes the core objectives of the IBC, namely, timely resolution, maximization of asset value, and equitable treatment of stakeholders. The case thus emerged as a jurisprudential flashpoint, compelling both the judiciary & IBBI to reckon with the destabilizing potential of unregulated forum shopping in insolvency proceedings.[2]
Forum shopping, in the context of Indian corporate insolvency, assumes a particularly insidious character. It constitutes a deliberate manipulation of the jurisdictional matrix by interested parties, principally debtors, but occasionally creditors, who seek to initiate or transfer proceedings to a judicial forum perceived to be strategically advantageous. This conduct is often predicated on assumptions regarding the disposition of particular benches, procedural laxity, or relative expedition of hearings. The fragmented bench structure of the NCLT, devoid of a stringent venue determination protocol akin to the principles of forum conveniens or lex fori, renders the insolvency regime vulnerable to such strategic behavior. The resultant forum shopping engenders procedural uncertainty, delays, and a perception of partiality, thereby eroding stakeholder confidence and undermining the institutional legitimacy of the insolvency process.
In the post-Jet Airways era, the phenomenon of forum shopping has acquired renewed salience, with litigants increasingly adept at leveraging jurisdictional indeterminacy to subvert or manipulate the resolution process. This has precipitated a broader jurisprudential crisis, necessitating an urgent recalibration of judicial and regulatory practices to arrest the proliferation of such conduct. The prevailing absence of a normative standard for seat determination invites discretionary inconsistencies and raises critical questions regarding the enforceability of procedural fairness and the integrity of adjudication. These deficiencies are compounded by the interplay between procedural law and substantive commercial interests, which often incentivize tactical forum selection over good-faith engagement with the insolvency framework.[3]
Consequently, the Jet Airways precedent compels a fundamental re-examination of the jurisdictional schema governing insolvency proceedings in India. It mandates the articulation of a uniform, binding framework for forum allocation that harmonizes procedural equity with adjudicatory efficiency. Such reform is indispensable not merely to curtail the malignancy of forum shopping, but also to safeguard the structural coherence of the IBC. It is imperative that judicial reasoning and regulatory rule-making evolve in tandem to insulate the insolvency process from strategic distortions, ensuring that corporate restructurings are adjudicated with consistency, predictability, and institutional impartiality.[4]
This reorientation must be informed by a rigorous analysis of post-Jet Airways forum selection patterns, the motivational architecture underpinning such strategies, and their downstream effects on stakeholder rights and process efficiency. An empirical and doctrinal mapping of these developments will serve as an essential predicate to the formulation of prescriptive solutions that reinforce the IBC’s mandate. Through such a critical legal lens, the Jet Airways case emerges not as an isolated anomaly, but as a revelatory episode in the broader quest for jurisdictional coherence, procedural justice, and normative consolidation within India’s insolvency jurisprudence.
[1]Supreme Court of India orders for liquidation of Jet Airways (India) Limited and recommends reform in the Insolvency and Bankruptcy Code, 2016, JSA, https://www.jsalaw.com/wp-content/uploads/2024/11/JSA-Prism-Insolvency-November-2024_Jet-Insolvency.Final_.pdf (last visited May 23, 2025).
[2]Id.
[3]Jashim Uddin Ahmed et al., The Bankruptcy of Jet Airways in India, 11 IIUM J. Case Stud. Mgmt. 23 (2020), https://doi.org/10.31436/ijcsm.v11i2.96.
[4] Id.