Explanation:

Swiss Challenge Method is a method of bidding, often used in public projects, in which an interested party initiates a proposal for a contract or the bid for a project. The government then puts the details of the project out in the public and invites proposals from others interested in executing it. On the receipt of these bids, the original contractor gets an opportunity to match the best bid.

• Applied to the ongoing bankruptcy cases, a Swiss Challenge may entail two rounds of bidding for a distressed company or its assets. Assume that Company A wins the first round of bidding by a quoting a price of 5,000 crore for a power plant. This will be made public and a second set of bids invited. If Company B quotes 5,500 crore, Company A will be offered a second opportunity to match it. If it refuses, Company B would be declared the winning bidder. If Company A steps up, then it will bag the power plant at 5,500 crore.
• The Swiss Challenge allows a seller to mix-and-match the features of both an open auction and a closed tender to discover the best price for an asset.
•  In the recent bankruptcy proceedings of Binani Cements, Indian banks came up against a sticky situation where UltraTech Cements bettered the winning bid by the Dalmia group, after the official bidding process came to an end. Bankers predictably were all for relaxing the rules a little bit if it meant more money in their coffers. But this position was legally challenged by the Dalmias. The Swiss Challenge method would solve this problem by allowing for two rounds of bidding.
•  The method also has other uses. In its original form, a Swiss Challenge allows an infrastructure developer to come up with a suo motu proposal for a new project without waiting for the government to call for bids. This can foster innovation, as contractors or developers may initiate projects that the powers-that-be didn‘t even think of. The method was upheld by the Supreme Court of India for awarding public projects and the Government of India has tried out this method in road and railway projects.