From Adversarial to Collaborative: Integrating Mediation into Insolvency Resolution for Sustainable Debt Recovery

Abstract

This study is about the challenges experienced in the Corporate Insolvency Resolution Process (CIRP) of India's Insolvency and Bankruptcy Code, 2016, due to the lengthy periods and internal fights prevailing among different stakeholders that cause the resolution of debts not to be achieved in a timely manner. It introduces mediation as an effective and lesser contentious means of solving a problem of the parties Alternative Dispute Resolution (ADR) that do away with the need of going to court and can see how they can work together to quickly come to an agreement. The findings show that when mediation becomes an integral part of the CIRP, it can lead to the benefits of the increased speed of a solution, preserving of the asset value, and confidence of the stakeholders, provided that the regulations are clear and the mediators are properly trained. The work has been pointed to the necessity for an appropriate design to incorporate mediation into insolvency procedures, thus, the idea is to create a more solid insolvency ecosystem.