INEFFECTIVENESS OF THE LAW ON CROSS INSOLVENSI UNCITRAL MODEL

Sefriani

doi:10.20961/yustisia.v0ixx.27858

Abstract

Legal problems due to cross border insolvency are increasingly complex. The United Nations has issued the 1997 Model Law on Cross border Insolvency (CBI) to help countries solve their CBI problems. However, this model law is not effective because very few countries adopted it. The legal problem studied is why very few countries adopted the model law and how to overcome the ineffectiveness of the model law. The results of the study indicate that the lack of adoption of the model law caused by: the model law is only a non-binding legislative text; Too much flexibility encourages deviations from the provisions; do not want to reduce their sovereignty, status quo, international cooperation recommended by the model law is not always of primary interest, and many countries have been bound by international agreements on regional CBI which are considered more relevant than the model law. The solutions that can be suggested to overcome the ineffectiveness of the model law on CBI are national bankruptcy laws mechanism; the International Treaties and Conventions mechanism; Rules, Regulations, Principles and Guidelines mechanisms and protocol or adhoc agreements.Treaties and Conventions; mekanisme Rules, Regulations, Principles and Guidelinesan dan mekanisme pembuatan protocol atau adhoc agreement.Kata kunci: model law; kepailitan lintas batas negara; adopsi

Highlights

Insolvency law firstly is implemented only in domestic area, whereas the respective parties or the location of the asset located only in one state, the issue and problems are not too complex (Rami EL Borai, 2006;8-9)
Transnational insolvency might be more complex when it involves subsidiaries, various business transaction from debtor, and creditor coming from many nations (Ignatius Andi, 2004:514)
UNCITRAL stated that Cross Border Insolvency (CBI): “... included cases where some of the creditors of the debtor are not from the state where the insolvency proceedings is taking place” ( Sudargo Gautama, 2008;47)

Summary

INTRODUCTION

Insolvency law firstly is implemented only in domestic area, whereas the respective parties or the location of the asset located only in one state, the issue and problems are not too complex (Rami EL Borai, 2006;8-9). The first legal issue , for instance, related with the existence of Par imparem non habet imperium principle , under international law provided that one sovereign country is not bound of another sovereign country, including its jurisprudence on domestic courts According to this principle, it will be difficult to rely on insolvency decision relied by foreign court to be acknowledged and implemented in place where the said assets located. In similar cases, Commercial Court Central Jakarta accepted insolvency application submitted by Choi Yon Hak and Kim Chang Bok with the evidence of South Korea Republic Pasport who run his business in Indonesia and obey all the law and regulations under Indonesian Law. The claim against Hong Young Soo( Korean citizen) with case registration number 06/PAILIT/2005/PN.Niaga/Jkt.Pst. The third legal issue under CBI is regarding the location of asset outside the nation whose decided the insolvency case. The choice of relevant material and integrated interpretation during interviews with stakeholders related to the main research issues

RESEARCH RESULT AND DISCUSSION

Settlement Recommendation

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