By: Avantika Tewari and Chetan R
INTRODUCTION
The Indian Insolvency and Bankruptcy Code (“IBC”), enacted in 2016, has been a cornerstone in reshaping the country’s corporate debt resolution landscape.[1] However, recent reports highlight persistent challenges, including prolonged resolution timelines and inequitable treatment of creditors.[2] As of 2023, the average resolution time under the IBC stands at 653 days, significantly exceeding the stipulated 330-day limit.[3] This inefficiency underscores the need for innovative approaches to enhance the insolvency resolution process.
Mediation, a well-established alternative dispute resolution mechanism, offers a promising solution to address these challenges. By facilitating dialogue and collaborative problem-solving, mediation has the potential to expedite resolutions and foster more equitable outcomes for all stakeholders.[4]
The recent success of mediation in high-profile cases, such as the Amazon-Future Group dispute,[5] demonstrates its efficacy in complex commercial conflicts. Moreover, with the advent of the Mediation Act[6] and the Indian Government’s support for mediation to resolve complex disputes,[7] intertwining this method of dispute resolution with insolvency would not be an unreasonable approach.
This article advocates for the integration of mediation into the Indian Insolvency Law, proposing a hybrid model that combines the structured framework of the IBC with the flexibility of mediation. To support this argument, this article employs Game Theory, a powerful analytical tool that can elucidate the strategic interactions between various stakeholders in insolvency proceedings. By modelling these interactions, this article aims to demonstrate how mediation can create a more cooperative environment, potentially leading to Kaldor-Hicks efficient outcomes.
The objective of this analysis is twofold: firstly, to make a compelling case for incorporating mediation within the existing insolvency framework, and secondly, to utilise Game Theory to illustrate the potential benefits for all parties involved. By examining the strategic choices available to debtors, creditors, and other stakeholders, we can predict how mediation might alter the dynamics of negotiations and lead to more efficient and equitable resolutions. This approach not only addresses the current inefficiencies in the Indian insolvency regime but also aligns with global best practices in corporate restructuring.
GAME THEORETICAL FRAMEWORK
Game Theory, a mathematical framework for analysing strategic interactions among rational decision-makers, has found extensive application across various disciplines, including economics, political science, and law.[8] The fundamental components of Game Theory include players, strategies, payoffs, and equilibrium. Players are the decision-makers in the game, each with a set of possible strategies or actions they can take.[9]
Strategies are the plans or choices available to players, aimed at maximising their payoffs, which are the outcomes or rewards resulting from the chosen strategies, often quantified in terms of utility or profit.[10] An equilibrium, particularly the Nash Equilibrium named after John Nash, occurs when players choose strategies that maximise their payoffs, given the strategies chosen by others, resulting in no player having an incentive to deviate unilaterally.[11]
In the field of law, game theory can be applied to model and understand the strategic behaviour of various legal actors, such as litigants, regulators, and lawmakers.[12] Legal scenarios often involve conflicts of interest, negotiations, and strategic decision-making, making game theory a valuable tool for legal analysis.[13]
For example, in litigation, plaintiffs and defendants engage in a strategic game where each party aims to maximise their own benefit while minimising costs. The decision to settle or proceed to trial can be analysed using game theory, considering the strategies and payoffs of both parties.[14] Settlement negotiations can be seen as a cooperative game where both parties work towards a mutually beneficial agreement, whereas a trial represents a non-cooperative game with adversarial strategies.[15]
Regulatory compliance is another area where game theory is applicable. Regulators and firms engage in a strategic game where regulators set rules and penalties, and firms decide whether to comply or violate these rules.[16] The interaction can be modelled to predict compliance behaviour and design effective enforcement strategies. Legal scholars like Randal C. Picker have demonstrated how game theory can illuminate the dynamics of contract negotiations, antitrust laws, and regulatory frameworks.[17] By understanding the strategic interactions and potential outcomes, policymakers can design legal rules that promote fair and efficient resolutions, reduce conflicts, and enhance cooperation among legal actors.
INSOLVENCY AS A GAME
The game of insolvency within the framework of game theory presents a complex, multi-faceted strategic interaction involving various players, each with distinct objectives, strategies, and potential payoffs.[18] This intricate game unfolds in an environment characterised by legal constraints, financial pressures, and often, asymmetric information.[19] The primary players in the insolvency game include creditors (both secured and unsecured, financial institutions, bondholders, and trade creditors), debtors (comprising the distressed company’s management and shareholders), regulatory bodies (courts, insolvency practitioners, and government agencies), and other stakeholders such as employees, customers, and suppliers.[20] Each of these players employs a range of strategies to maximise their payoffs within the constraints of the insolvency process.[21]
Creditors, for instance, may opt for aggressive recovery tactics, pushing for immediate liquidation to recover assets quickly. Alternatively, they might engage in cooperative restructuring, participating in negotiations for debt restructuring or company reorganisation.[22] Some creditors might choose to free-ride, benefiting from the efforts of others without active participation, while others may form coalitions to increase their bargaining power.[23] The payoffs for creditors are primarily measured in terms of the recovery rate of their claims, the time to recovery, and for trade creditors, the preservation of future business relationships with the debtor.[24]
Debtors, on the other hand, strategise to minimise their liabilities while retaining control over their assets.[25] Their strategies may include proposing reorganisation plans, engaging in strategic default to force renegotiation of terms, concealing or undervaluing assets to reduce pay-outs to creditors, or seeking new financing to continue operations.[26] The payoffs for debtors are reflected in the reduction of liabilities, retention of control over the company, and for owner-managers, the preservation of personal assets.[27]
Regulatory bodies, acting as rule-setters and enforcers, influence the game’s structure through legal frameworks and enforcement mechanisms.[28] Their strategies involve balancing the interests of various stakeholders while maintaining market stability and maximising the value of distressed assets.[29] They may opt for strict enforcement of insolvency laws, allow for more flexible interpretation to facilitate negotiations, or act as mediators to foster mutually beneficial solutions.[30] The payoffs for regulatory bodies are measured in terms of efficient resolution of cases, maximisation of overall economic value, and maintenance of market stability and creditor confidence.[31]
The strategic interactions within this game are characterised by several key features. First, creditors face a coordination problem, as highlighted by Annabi, Breton, and François.[32] While cooperation among creditors could lead to higher overall recovery, individual creditors may be incentivised to pursue aggressive recovery tactics, potentially leading to suboptimal outcomes for all.[33] This scenario resembles a multi-player prisoner’s dilemma, where the Nash equilibrium may not be Pareto optimal or Kaldor-Hicks efficient.[34]
Second, the game is marked by significant information asymmetry. Debtors often possess more accurate information about the company’s true financial state and future prospects.[35] This asymmetry can lead to strategic behaviour, such as debtors proposing overly optimistic reorganisation plans or creditors underestimating the company’s viability.[36] The presence of asymmetric information transforms the game into one of incomplete information, where players must make decisions based on their beliefs about other players’ private information.[37] Third, the insolvency game often involves multiple rounds of negotiation and decision-making, resembling a repeated game structure. This dynamic nature allows for the development of reputational effects and the potential for cooperative strategies to emerge over time.[38] Players may adjust their strategies based on the outcomes of previous rounds, leading to complex equilibrium patterns.[39]
Fourth, the heterogeneous interests of different creditor classes add another layer of strategic complexity to the game.[40] As demonstrated by Prasad, Gupta, and Mathur in their analysis of Indian bankruptcy proceedings, operational and financial creditors may have divergent priorities, leading to conflicts within the creditor group and influencing the overall outcome of the insolvency process.[41] Fifth, the strategies employed by regulatory bodies can significantly alter the payoff structure and equilibrium outcomes of the game.[42] Strict enforcement of creditor priorities may lead to more predictable outcomes but could discourage cooperative solutions that might preserve more value.[43] Conversely, a more flexible approach might encourage negotiation but could introduce uncertainty into the process.[44]
Sixth, the timing of actions in insolvency proceedings can significantly impact payoffs. Creditors must weigh the potential benefits of immediate action against the option value of waiting for potentially improved conditions.[45] This aspect introduces elements of real options theory into the game-theoretic analysis, further complicating the strategic landscape.[46] Lastly, the ability of players to form coalitions adds another strategic dimension to the game. Creditors may align to increase their bargaining power, while debtors might seek alliances with certain creditor groups to gain support for their proposals.[47] These coalitions can dramatically alter the balance of power within the game and influence its ultimate outcome.[48]
SOLVING THE GAME OF INSOLVENCY THROUGH MEDIATION
Achieving Kaldor-Hicks Efficient
Incorporating mediation into the insolvency game transforms it from a potentially adversarial process into a cooperative game, offering significant efficiency gains.[49] Mediation, as a structured negotiation process facilitated by a neutral third party, can address the coordination problems and information asymmetries inherent in insolvency proceedings.[50] The efficiency gains from mediation primarily stem from reduced time and costs compared to litigation or arbitration.[51] By fostering direct communication between parties, mediation can expedite the resolution process, minimising the time assets remain in a state of uncertainty.[52] This rapid resolution preserves asset value and reduces administrative costs, directly benefiting all stakeholders.[53] Moreover, the flexibility of mediation allows for creative solutions that may not be available through formal legal processes, potentially leading to higher overall recovery rates.[54]
In the context of game theory, mediation shifts the insolvency game towards a cooperative framework, where players work collectively to maximise the total available value.[55] This shift aligns with the concept of Kaldor-Hicks efficiency, which posits that an outcome is efficient if those who benefit could theoretically compensate those who are worse off, resulting in a Pareto-efficient outcome.[56]
For creditors, mediation offers the potential for faster recovery and reduced legal costs. While some creditors may need to compromise on their initial claims, the overall efficiency gains can lead to higher net recoveries.[57] Secured creditors, who might otherwise push for immediate liquidation, may find value in exploring restructuring options that preserve going-concern value. Unsecured creditors, often at a disadvantage in formal proceedings, can gain a more equitable voice in the mediation process.[58]
Debtors benefit from the opportunity to present restructuring plans in a less adversarial environment, potentially retaining control over their business and preserving value for shareholders.[59] The cooperative nature of mediation allows debtors to leverage their insider knowledge of the business to propose viable turnaround strategies, addressing the information asymmetry issue highlighted earlier.[60] Regulatory bodies and courts can achieve their objectives of efficient case resolution and maximisation of economic value through mediation. By encouraging mediation, they can reduce the burden on the formal insolvency system, allowing resources to be allocated more efficiently.[61]
The Kaldor-Hicks efficient outcome in mediated insolvency can be illustrated through a scenario where creditors agree to a debt restructuring that allows the business to continue operations.[62] While some creditors may receive less than their full claim, the preservation of the business as a going concern creates additional value that can theoretically compensate for these concessions.[63] This outcome may not be strictly Pareto-efficient, as some parties may be worse off compared to their initial position, but it is Kaldor-Hicks efficient if the total value created exceeds the value that would be realised through liquidation.[64]
Achieving Nash Equilibrium
The Nash equilibrium in mediated insolvency emerges as a delicate balance between individual and collective interests.[65] Unlike in adversarial proceedings, where Nash equilibrium often results in suboptimal outcomes due to the prisoner’s dilemma-like scenario, mediation facilitates a more efficient equilibrium point. This efficiency stems from the mediator’s ability to reduce information asymmetries and coordinate actions among players.[66]
To illustrate how Nash equilibrium is reached in a game of insolvency through mediation, we can use a simplified two-player game model representing the interaction between creditors and debtors. This graphical representation will help visualise the strategic choices and payoffs, demonstrating how mediation guides the players towards a cooperative Nash equilibrium. Consider a 2×2 payoff matrix where both creditors and debtors have two strategies: Cooperate (C) or Not Cooperate (NC). The payoffs are represented as (Creditor payoff, Debtor payoff).
| Creditor Debtor | C | NC |
| C | (5, 5) | (1, 6) |
| NC | (6, 1) | (2, 2) |
In this matrix,
- (5,5) represents the cooperative outcome through mediation,
- (2,2) represents the non-cooperative outcome (e.g., litigation),
- (6,1) and (1,6) represent outcomes where one party exploits the other’s cooperation.
Without mediation, the Nash equilibrium would typically be (NC, NC) with payoffs (2,2), as neither player can unilaterally improve their position by changing strategy. To visualise how mediation shifts this equilibrium, we can plot these strategies on a graph:
In the above graph, Point A marks the Cooperative Outcome where both the Creditor and the Debtor choose to cooperate through mediation. Point B marks the Non-Cooperative Outcome where both the Creditor and the Debtor choose to not cooperate through mediation. Point C marks the instance where the Creditor (holding the greater sway), exploits the Debtor. Point D marks the instance where the Creditor (holding the lesser sway) gets exploited by the Debtor. The Line AB marks the Mediation Path,[67] which is the movement of the Nash equilibrium from a situation where there is no mediation to a situation where there is mediation. The Line DAC marks the Pareto Frontier which is the line marking all the possible set of Pareto-efficient solutions.[68]
One of the most significant impacts of mediation is the expansion of the feasible set of outcomes. Graphically, this is represented by a shaded area extending beyond the original ABCD quadrilateral. This expansion reflects the mediator’s ability to facilitate creative solutions not available in formal legal processes, thereby increasing the potential for value creation and mutual benefit. The enlarged feasible set encompasses a range of possible agreements that were previously unattainable, highlighting the capacity of mediation to generate novel solutions to complex insolvency challenges.
Mediation also alters the perceived payoff structure by addressing key barriers to cooperation. By reducing information asymmetries, lowering transaction costs, and mitigating risks associated with non-cooperation, mediation effectively shifts the position of point A (5,5) closer to the origin relative to points C and D. This transformation makes the cooperative strategy more attractive to both parties, as it reduces the potential gains from exploitative behaviour while enhancing the benefits of collaboration. The visual representation of this shift on the graph from Point B to the Pareto Frontier, underscores the power of mediation to realign incentives and foster a more cooperative mind-set among the parties involved.
The path from the initial non-cooperative equilibrium (point B) to the cooperative outcome (point A) is represented by the Mediation Path on the graph. With the introduction of other variables into the matrix, this Mediation Path would not necessarily be linear but rather be curved, illustrating the iterative and dynamic nature of the mediation process. Each point along this curve represents a potential interim agreement among the different variable parties, reflecting the step-by-step progress made during mediation sessions. The non-linear nature of this path emphasises the complexity of negotiations in insolvency proceedings and the skill required of mediators to navigate this terrain effectively.
A critical element in the graphical analysis is the Nash bargaining solution, marked on the Pareto frontier between Line CD, which is somewhere near Point A. This solution represents the most likely outcome of successful mediation, maximising the product of both parties’ gains relative to their non-cooperative payoffs. The position of this point on the graph provides insight into the balance struck between the interests of creditors and debtors, reflecting the mediator’s role in facilitating a fair and mutually beneficial agreement.
The stability of the new equilibrium achieved through mediation is reinforced by several factors visible on the graph. Firstly, its position on or near the Pareto frontier indicates that no party can improve their position without the other being worse off, ensuring a degree of optimality. Secondly, the new equilibrium satisfies individual rationality constraints, as both parties achieve better outcomes than at the original non-cooperative point B. Lastly, the equilibrium accounts for the dynamic nature of insolvency proceedings, making it a subgame perfect equilibrium in repeated interactions, which is crucial for long-term stability and compliance with agreements.
The area between the original Pareto frontier (CBD) and the expanded feasible set (CAD) represents potential Kaldor-Hicks improvements. This concept is particularly relevant in insolvency mediation, as it allows for outcomes that create additional value that can theoretically compensate any party that might be worse off compared to their maximum individual payoff. The visualisation of this area on the graph highlights the potential for mediation to generate solutions that enhance overall economic efficiency while addressing distributional concerns.
The strategic implications of mediation, as illustrated by the graph, are profound. The reduced appeal of exploitative strategies (points C and D) is visually apparent, as their relative payoffs become less attractive compared to the cooperative outcome. Simultaneously, the expected value of cooperation increases, represented by the more favourable position of point A. The Nash bargaining solution serves as a focal point on the graph, acting as a coordination device for the parties and guiding them towards a mutually acceptable outcome.
In practice, the achievement of equilibrium through mediation is a dynamic process, visualised as a spiralling path from B towards A. Each turn of this spiral represents a round of negotiation or information exchange, reflecting the iterative nature of mediation and the gradual convergence of parties’ positions towards a final agreement. The mediator’s role in facilitating this equilibrium can be mapped onto various aspects of the graph.
Information sharing moves the path more directly towards point A by reducing uncertainty and aligning expectations. The proposal of compromise solutions creates new points within the expanded feasible set, illustrating the mediator’s role in generating creative options. Reality testing adjusts parties’ perceptions of the relative positions of points A, B, C, and D, helping to align expectations with realistic outcomes and facilitating movement towards a stable equilibrium.
This comprehensive analysis of the graphical representation demonstrates how mediation fundamentally alters the game structure in insolvency proceedings. By expanding the feasible set, realigning incentives, and facilitating information exchange, mediation guides parties towards a new Nash equilibrium that is both stable and more efficient than the original non-cooperative outcome. This equilibrium represents a delicate balance between individual and collective interests, aligning with the broader goals of insolvency proceedings to maximise value and achieve equitable distribution.
CONCLUSION
This paper has explored the integration of mediation into India’s IBC using game theory as an analytical tool. The current inefficiencies in the IBC, such as prolonged resolution timelines and inequitable treatment of creditors, highlight the need for innovative approaches. Mediation, as an alternative dispute resolution mechanism, offers a promising solution by fostering cooperation, reducing information asymmetries, and expediting resolutions.
Game-theoretic analysis reveals that the strategic interactions among creditors, debtors, and regulatory bodies often lead to suboptimal outcomes due to coordination problems and heterogeneous interests. By transforming the insolvency game into a more cooperative framework, mediation can guide stakeholders towards a Nash equilibrium that is closer to the Pareto frontier, enhancing overall economic value.
The flexibility of mediation allows for creative solutions, potentially leading to faster resolutions and higher recovery rates. This study provides a compelling case for policymakers to consider mediation as a means to enhance the efficiency and equity of India’s corporate debt resolution landscape, aligning with global best practices in corporate restructuring. Integrating mediation within the IBC framework could significantly improve the insolvency process, benefiting all stakeholders involved.
Most importantly, to reiterate the Indian Government’s willingness to buttress the utilisation of mediation, especially institutional mediation, for the expedited and cost-effective resolution of commercial and non-commercial disputes, it makes all the more sense for policymakers to align the Mediation Act with the IBC, which itself was introduced nearly a decade ago, with these aims –
“To consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.”
While the Indian Government continues its efforts to present the country as a lucrative destination for foreign and domestic investors, with considerable ‘ease of business’,[69] it has also shown concern against the unfavourable climate for countries like India when commercial disputes, especially those involving foreign investors, are arbitrated frequently in favour of the investors/non-state parties.[70] In such circumstances, it is advisable for the policy makers to place their trust in mediation and ensure a more holistic resolution of insolvencies and bankruptcies within India, particularly for entities with foreign investors or funding.
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[2] Abhiman Das, ‘Insolvency and Bankruptcy Reforms: The Way Forward’ (2020) 45(2) Vikalpa: The Journal for Decision Makers 115.
[3] ‘IBC recovery rates have fallen, even as average resolution time has increased: CRISIL Ratings’ (The Hindu Business Line, 24 November 2023) <https://www.thehindubusinessline.com/companies/ibc-recovery-rates-have-fallen-even-as-average-resolution-time-has-increased-crisil-ratings/article67569134.ece> accessed 1 August 2024.
[4] Howard W. Cummins, ‘Let Us Reason Together: The Role of Process in Effective Mediation’ (2013) 33 Journal of the National Association of Administrative Law Judiciary 1.
[5] Priyanka Gawande, ‘Amazon and Future agree to out-of-court settlement proposal’ (Live Mint, 4 March 2022) <https://www.livemint.com/companies/news/amazonfuture-dispute-sc-suggests-mediation-11646292778856.html> accessed 1 August 2024.
[6] Mediation Act 2023, pmbl.
[7] Mohammed Talib and Scheherazade Dubash, ‘Indian government to encourage mediation for large public procurement disputes in India’ (Pinsent Masons, 19 June 2024) <https://www.pinsentmasons.com/out-law/news/indian-gov-encourage-mediation-large-public-procurement> accessed 1 August 2024.
[8] Edwin Ho, ‘Game Theory in Defence Applications: A Review’ (2022) 22(3) Sensors 1032.
[9] Anthony Kelly, Decision Making using Game Theory: An Introduction for Managers (Cambridge University Press).
[10] Philip D. Straffin, Game Theory and Strategy (Mathematical Association of America, 1993).
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[13] Howard Raiffa, John Richardson & David Metcalfe, Negotiation Analysis: The Science and Art of Collaborative Decision Making (Harvard University Press, 2007).
[14] Steven Shavell, ‘Suit and Settlement vs. Trial: A Theoretical Analysis under Alternative Methods for the Allocation of Legal Costs’ (1982) 11 Journal of Legal Studies 55.
[15] Michael B. Abramowicz, ‘Modelling Settlement Bargaining with Algorithmic Game Theory’ (GWU Law School Public Law Research Paper No. 2020-80 2020).
[16] John T. Scholz, ‘Cooperation, Deterrence, and the Ecology of Regulatory Enforcement’ (1984) 18(2) Law & Society Review 179.
[17] Randal C. Picker, ‘An Introduction to Game Theory and the Law’ (Coase-Sandor Institute for Law & Economics Working Paper No. 22, 1994).
[18] Prajit K. Dutta, Strategies and Games Theory and Practice (Massachusetts Institute of Technology, 1999).
[19] Iryna Heiets, Tamara Oleshko and Oleg Leshchinsky, ‘Application of Game Theory to Business Strategy’ in Business and Management (IntechOpen, 2023).
[20] Bernhard von Stengel, Game Theory Basics (London School of Economics, 2011).
[21] ibid.
[22] Matthew Braham & Frank Steffen, ‘Voting Rules in Insolvency Law: A Simple-Game Theoretic Approach’ (2003) 22 International Review of Law and Economics 421.
[23] Arturo Bris and Ivo Welch, ‘The Optimal Concentration of Creditors’ (2005) 60(5) Journal of Finance 2193.
[24] Anthony J. Casey, ‘The Creditors’ Bargain and Option-Preservation Priority in Chapter 11’ (2011) 78(3) University of Chicago Law Review 759.
[25] Reinier H. Kraakman, ‘Corporate Liability Strategies and the Costs of Legal Controls’ (1984) 93 Yale Law Journal 857.
[26] Jean Tirole, The Theory of Corporate Finance (Princeton University Press, 2006).
[27] Barry E. Adler, ‘Game-Theoretic Bankruptcy Valuation’ (2012) 41 Journal of Legal Studies 209.
[28] Anna Y. Veretennikova and Daria A. Selezneva, ‘Development of Regulatory Strategies in the Sharing Economy: The Application of Game Theory’ (2023) 11(12) Economies 298.
[29] Aaryan Dhasmana and Avanish Kar, ‘“A Race to Collect”: Unravelling the Economic Underpinnings of Conflicting Creditor Interests in the Indian Insolvency Regime’ (GNLE Journal of Law & Economics, 26 November 2023) <https://gjle.in/2023/11/26/a-race-to-collect-unravelling-the-economic-underpinnings-of-conflicting-creditor-interests-in-the-indian-insolvency-regime-2/> accessed 5 August 2024.
[30] ibid.
[31] Dhasmana and Kar (n 29).
[32] Amira Annabi, Michèle Breton and Pascal François, ‘Game Theoretic Analysis of Negotiations under Bankruptcy’ (2012) 221 European Journal of Operational Research 603.
[33] ibid.
[34] Rachel Siew Lin Le, ‘How is ‘efficiency’ determined in the insolvency context?’ (DPhil thesis, University of Queensland 2015).
[35] Christopher S. Armstrong, Wayne R. Guay and Joseph P. Weber, The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting (University of Pennsylvania, 2010).
[36] ibid.
[37] Branislav L. Slantchev, Game Theory: Static and Dynamic Games of Incomplete Information (University of California San Diego, 2008).
[38] Robin Christmann and Dennis Klein, ‘Game Theory, Compliance, and Corporate Criminal Liability: Insights from a Three-Player Inspection Game’ (2024) 11 Decision Analytics Journal 100431.
[39] Slantchev (n 37).
[40] Keith Pond, ‘Creditor strategy in individual insolvency’ (2002) 28(6) Managerial Finance 46.
[41] Rohit Prasad, Gaurav Gupta and Yogesh B. Mathur, ‘A Game Theoretic Analysis of the Relative Payouts to Operational Creditors and Financial Creditors from Bankruptcy Resolution in India’ (2020) 11 Asian Journal of Law and Economics 1.
[42] Tomasz Raducha and Maxi San Miguel, ‘Coordination and Equilibrium Selection in Games: The Role of Local Effects’ (2022) 12 Scientific Reports 3373.
[43] Rolef de Weijs, ‘Too Big to Fail as a Game of Chicken with the State: What Insolvency Law Theory Has to Say about TBTF and vice versa’ (2013) 14 European Business Organisation Law Review 201.
[44] ibid.
[45] Barry E. Adler and George Triantis, ‘Debt Priority and Options in Bankruptcy: A Policy Intervention’ (2017) 91 American Bankruptcy Law Journal 563.
[46] ibid.
[47] Diane Lourdes Dick, ‘Alliance Politics in Corporate Debt Restructurings’ (2023) 39(2) Emory Bankruptcy Developments Journal 287.
[48] ibid.
[49] Johanne Elizabeth O’Hanlon, ‘Can Lessons from Game Theory Be Applied to Family Law Negotiations?’ (LLM Thesis, McGill University, 2006).
[50] Siniša Vuković, International Multiparty Mediation and Conflict Management (Routledge, 2016).
[51] Stephen B. Goldberg, Frank E.A. Sander, Nancy H. Rogers and Sarah Rudolph Cole, Dispute Resolution: Negotiation, Mediation, Arbitration, and Other Processes (Wolters Kluwer, 2020).
[52] Stephanie Smith and Janet Martinez, ‘An Analytic Framework for Dispute Systems Design’ (2009) 14 Harvard Negotiation Law Review 123.
[53] James E. Post, Lee E. Preston, Sybille Sauter-Sachs and Sybille Sachs, Redefining the Corporation: Stakeholder Management and Organizational Wealth (Stanford Business Books, 2002).
[54] David Spencer and Michael Brogan, Mediation Law and Practice (Cambridge, 2006).
[55] Charlie Woods, ‘Revisiting Game Theory and Mediation’ (Kluwer Mediation Blog, 8 October 2021) <https://mediationblog.kluwerarbitration.com/2021/10/08/revisiting-game-theory-and-mediation/> accessed 20 August 2024.
[56] George F. DeMartino, ‘Harming Irreparably: On Neoliberalism, Kaldor-Hicks, and the Paretian Guarantee’ (2015) 73(4) Special Issue: Ethics, Global Finance and the Great Recession 315.
[57] Rajiv Mani, ‘Mediation in Insolvency Matters’ in Framework for Use of Mediation under the Insolvency and Bankruptcy Code, 2016 (IBBI, January 2024).
[58] Pascal François and Hassan Naqvi, ‘Secured and Unsecured Debt in Creditor-Friendly Bankruptcy’ (2023) 80 Journal of Corporate Finance 102413.
[59] Adler and Triantis (n 45).
[60] Lourdes Munduate, Francisco J. Medina and Martin C. Euwema, ‘Mediation: Understanding a Constructive Conflict Management Tool in the Workplace’ (2022) 38(3) Journal of Work and Organizational Psychology 165.
[61] Scott Atkins, ‘Mediation as a bankruptcy and insolvency game changer’ (Norton Rose Fulbright) <https://www.nortonrosefulbright.com/en/knowledge/publications/50ba6f9d/mediation-as-a-bankruptcy-and-insolvency-game-changer> accessed 1 September 2024.
[62] Keith Crawford, ‘The Law and Economics of Orderly and Effective Insolvency’ (D.Phil., 2012).
[63] Akingbolahan Adeniran, ‘A Mediation-Based Approach to Corporate Reorganizations in Nigeria’ (2003) 29 North Carolina Journal of International Law and Commercial Regulation 291.
[64] David Christoph Ehmke, ‘Publicly Offered Debt in the Shadow of Insolvency’ (2015) 16 European Business Organization Law Review 63.
[65] Michael N. Widener, ‘The Five-Tool Mediator: Game Theory, Baseball Practices, and Southpaw Scouting’ (2012) 12 Pepperdine Dispute Resolution Law Journal 97.
[66] Robert W. Rauchhaus, ‘Asymmetric Information, Mediation, and Conflict Management’ (2006) 58(2) World Politics 207.
[67] Widener (n 65).
[68] Ewout Van Den Berg and Michael P. Friedlander, ‘Probing the Pareto Frontier for Basis Pursuit Solutions’ (2008) 31(2) Society for Industrial and Applied Mathematics 890.
[69] ‘Business Friendly Reforms: India’s Path to Prosperity’ (Invest India, 16 March 2024) <https://www.investindia.gov.in/team-india-blogs/business-friendly-reforms-indias-path-prosperity#:~:text=According%20to%20the%20World%20Bank’s,to%2063rd%20rank%20in%202020.> accessed 5 September 2024.
[70] Satwik Shekhar, ‘Regulatory Chill’: Taking Right to Regulate for a Spin’ (2016) Working Paper CWS/WP/200/27 Centre for WTO Studies <https://wtocentre.iift.ac.in/workingpaper/%27REGULATORY%20CHILL%E2%80%99%20TAKING%20RIGHT%20TO%20REGULATE%20FOR%20A%20SPIN%20(September%202016).pdf> accessed 5 September 2024.
(Avantika Tewari and Chetan R are law undergraduates from the National Law School of India University, Bengaluru. The authors may be contacted via email at avantikatewari@nls.ac.in and chetanr@nls.ac.in.)
Cite as: Avantika Tewari and Chetan R, Mediating the Game of Insolvency: Unlocking Efficiency and Equity in India’s Bankruptcy Landscape, 11th April 2025 <https://rmlnlulawreview.com/2025/04/11/mediating-the-game-of-insolvency-unlocking-efficiency-and-equity-in-indias-bankruptcy-landscape/> date of access.