2 hrs ago

India’s Insolvency Framework Faces New Questions From AI Transactions

India's insolvency framework must adapt to AI: here are some potential grey areas to think about · livemint.com

India’s insolvency rules may need to change as businesses increasingly use AI agents.

An AI agent can make decisions and complete transactions for a company.

Sometimes, a transaction could look normal when an AI performs it.

The same transaction might look suspicious if a human had done it.

The situation becomes more complicated when two AI agents conduct business with each other.

At first, that deal might appear to be an ordinary business transaction.

But AI systems can potentially be trained unfairly or manipulated.

This creates difficult questions about whether the transaction should be allowed or investigated under insolvency law.

Key facts

Core issue: Whether India’s insolvency framework can adequately address transactions executed by AI agents.
Normal-course question: An AI-executed transaction may be considered part of a corporate debtor’s normal business.
Human comparison: The same transaction carried out by a human might be categorized as probable avoidance.
AI-to-AI transactions: Deals between two AI agents could prima facie appear to be in the normal course of business.
Model manipulation: Unfair manipulation of AI model weights could complicate the assessment of a transaction.
Legal uncertainty: The article identifies potential grey areas rather than providing definitive legal answers.

livemint.com · 2 hrs ago