Creditor Participation in Insolvency Proceedings - Towards the Adoption of International Standards

Abstract

Effective creditor participation in insolvency proceedings has been widely seen as an essential feature of any well-developed insolvency administration system. This notion has been expressed in different ways in national systems of insolvency law, ranging from principles such as the pari passu rule and the conduct of creditor meetings to decide matters of importance in the insolvency proceedings, to the role of insolvency representatives in such proceedings. The last decade has seen the emergence of a number of multilateral efforts to more clearly articulate insolvency norms or 'best practice' guidelines; these have included such outcomes as the Asian Development Bank’s 2000 Good Practice Standards, the World Bank and International Monetary Fund’s 2005 draft Principles for Effective Insolvency and Creditor Rights Systems and the monumental 2004 UNCITRAL Legislative Guide on Insolvency Law. The emergence of these multilateral statements has recognised the regional and global significance of insolvency laws and the role that they play in providing a foundation for a market economy. This article examines the creditor participation standards evident in this body of international best practice norms. Ultimately, it is argued that creditor participation in insolvency is an essential element in a rule of law based market economy.