Cross-border Insolvency Proceedings Research Articles

Cross-border Insolvency Protocols: Cooperation, Coordination, and Communication Duties under the European Insolvency Regulation Recast

Cross-border insolvency protocols are a practical phenomenon developed at the international level in the last 30 years. These protocols are agreements entered by the insolvency practitioners to facilitate cooperation and communication between insolvency practitioners and courts involved in cross-border insolvency proceedings. Protocols have been mentioned but not regulated by the European Insolvency Regulation Recast. This contribution seeks to analyse the aims, principles, and standard features of the protocols emerging in practice. Second, it aims to evaluate how this phenomenon fits with the duties of cooperation, coordination, and communication within the European Insolvency Regulation Recast to define the scope and role of protocols within the EU member states. Cross-border insolvency, protocols, transnational, cooperation, coordination, communication, European Insolvency Regulation

Jurisdiction over Cross-Border Insolvency Proceedings

The analysis of the opening of insolvency proceedings under European Union law involves the identification of incidental rules applicable to the insolvency proceedings with an element of foreignness when it concerns the Member States. In order to ensure a comprehensive understanding of cross-border insolvency proceedings, it is necessary to analyze the relevant rules in the field of private international law, when the international character of the insolvency legal relationship is reflected in relation to another third country of the European Union.

International Arbitration and Cross-Border Insolvency—Friends or Foes? Revisiting the Role of Arbitration in Resolving Cross-border Insolvency-Related Disputes

Abstract In the midst of a global pandemic, whose economic consequences are still unfolding, cross-border insolvencies loom closer. Besides the ripple effect cross-border insolvency cases might have on the economy, another cause of concern lies in the complexity of resolving such cases. Against this backdrop, this contribution posits that international arbitration may facilitate the resolution of some of the cross-border insolvency-related disputes as long as certain safeguards are put in place. Consequently, the perceived advantages of international arbitration may ease the already intricate cross-border insolvency proceedings, relieving insolvency courts around the world.

The Role of Consent in European Cross-Border Insolvency Proceedings: The Unilateral Undertaking under Article 36 EIRR

Abstract Properly balancing between public and private interests is one of the most significant and complex challenges presented by modern insolvency law. The European Union insolvency law has recently embraced that challenge, by reinforcing the role that private actors, such as creditors and stakeholders, are called upon to play within the context of insolvency proceedings. That approach to insolvency has gradually reduced the impact of public actors, such as judges and public officers, in managing the debtor’s financial difficulties. The individual consent seems to be the new way of facing the debtor’s insolvency. First, this Article examines the role of individual consent in insolvency proceedings in terms of economic efficiency. It focuses on the tendency to favor agreements between the debtor and creditors or the insolvency practitioner in several European legal systems when they increase the likelihood to produce efficient results for both the parties. The second part of this Article focuses on the European Regulation on cross-border insolvency proceedings no. 848/2015. I offer some critical thoughts about the unilateral undertaking under article 36 of the European Regulation. It represents a relevant means of managing the debtor’s cross-border insolvency through an agreement between the insolvency practitioner in the main insolvency proceedings and local creditors in order to avoid the opening of inefficient secondary proceedings.

Особенности рассмотрения заявлений физических лиц – иностранных элементов о несостоятельности (банкротстве) в Российской Федерации

In this article the author analyzes material and procedural features of international individual’s bankruptcy petition in Russian Federation. Actuality of this topic is confirmed by the increasing amount of cross-border insolvency proceedings (bankruptcy)while there are a lot of unsolved collisions in the national law of different countries

The (Underdeveloped) Use of Arbitration in International Insolvency Proceedings

The commencement of insolvency proceedings has mostly been perceived as a form of disturbance in the arbitration world because it could provide a cause to stay pending arbitration proceedings and hinder the enforcement of arbitral clauses and arbitral awards. Most of the academic discussion has focused on these issues. This article will discuss these issues only briefly. Instead, it aims at demonstrating that disputes which arise in the context of international insolvency proceedings could benefit from a more advanced use of arbitration. The article explains the arbitrability of disputes in insolvency proceedings and the limited scope of the public policy defense with the national insolvency laws functioning as a gatekeeper to arbitration. Consistent with existing insolvency case law in many jurisdictions, an arbitration-friendly approach is formulated. Following this approach, the article outlines disputes that could be resolved efficiently when addressed in arbitration. Insolvency, arbitration, arbitrability, bankruptcy, core bankruptcy issue, public policy, cross-border insolvency proceedings, related disputes

A game theory analysis of China’s maritime cross-border insolvency policy: from the perspective of Hanjin shipping’s bankruptcy case

ABSTRACT Financial difficulties experienced within the shipping industry have caused an increasing number of maritime cross-border insolvencies. The UNCITRAL Model Law on Cross-Border Insolvency (the Model Law) is designed to assist countries in equipping their insolvency laws with a modern framework that more effectively addresses cross-border insolvency proceedings. This paper discusses whether China should adopt the Model Law, using the method of strategic game theory based on the Hanjin Bankruptcy case. Our results show that, from the perspective of a mathematical evaluation, China should not adopt the Model Law, since Hanjin declared bankruptcy with South Korea’s adoption already having taken place. Even if the Model Law is adopted, its application in China will be very limited due to the structure of Chinese shipping enterprises.

The Role of Consent in Cross-Border Insolvency Proceedings: European and Comparative Perspectives From the Unilateral Undertaking Under Article 36 EIRR

Properly balancing between public and private interests is one of the most significant and complex challenges presented by modern insolvency law. The European Union insolvency law has recently embraced that challenge, by reinforcing the role that private actors, such as creditors and stakeholders, are called upon to play within the context of insolvency proceedings. That approach to insolvency has gradually reduced the impact of public actors, such as judges and public officers, in managing the debtor’s financial difficulties. The individual consent seems to be the new way of facing the debtor’s insolvency. First, this Article examines the role of individual consent in insolvency proceedings in terms of economic efficiency. It focuses on the tendency to favor agreements between the debtor and creditors or the insolvency practitioner in several European legal systems when they increase the likelihood to produce efficient results for both the parties. The second part of this Article focuses on the European Regulation on cross-border insolvency proceedings no. 848/2015. I offer some critical thoughts about the unilateral undertaking under article 36 of the European Regulation. It represents a relevant means of managing the debtor’s cross-border insolvency through an agreement between the insolvency practitioner in the main insolvency proceedings and local creditors in order to avoid the opening of inefficient secondary proceedings.

Technology and Regulatory Black Holes: Issues in Protecting IP Rights in Insolvency for Both Licensors and Licensees

Australia’s insolvency laws have a curious deficiency: There are virtually no provisions on the treatment of ongoing contracts. Such contracts may well represent some of the most valuable assets of a business debtor, small or large, especially in this new era of rapid technological innovation, where tangible property often pales in value to that inherent in intellectual property. Indeed, IP rights are often the nucleus around which a small business’ vitality revolves. The inability of businesses predictably to rely on, manage, and protect license contracts preserving IP rights is a problem that is sure to become more acute in the coming decades, as both the importance of IP rights and the incidence of business insolvency rise. Experience from across the Pacific portends a potential wave of coming disputes involving such rights in developed economies like Australia’s, potentially hitting small entrepreneurs hard and undermining the effectiveness of insolvency proceedings for these crucial debtors and their creditors. This article reveals a proliferation of disputes concerning IP license rights and several salient challenges confronted by both licensors and licensees, debtors and non-debtors, in domestic and cross-border insolvency proceedings in US insolvency proceedings. The common root of these challenges seems to be legislation that did not foresee the rise of IP licensing as a mainstay of modern entrepreneurship. The simple common solution, and a guide for Australian regulators, is more careful consideration of non-obvious pitfalls in laws that preserve IP license rights in insolvency cases to maximise value not only for the parties involved, but for modern societies who increasingly depend on innovation and entrepreneurship.

Technology and Regulatory Black Holes: Issues In Protecting IP Rights In Insolvency for Both Licensors and Licensees

Australia’s insolvency laws have a curious deficiency: There are virtually no provisions on the treatment of ongoing contracts. Such contracts may well represent some of the most valuable assets of a business debtor, small or large, especially in this new era of rapid technological innovation, where tangible property often pales in value to that inherent in intellectual property. Indeed, IP rights are often the nucleus around which a small business’s vitality revolves. The inability of businesses predictably to rely on, manage, and protect license contracts preserving IP rights is a problem that is sure to become more acute in the coming decades, as both the importance of IP rights and the incidence of business insolvency rise. Experience from across the Pacific portends a potential wave of coming disputes involving such rights in developed economies like Australia’s, potentially hitting small entrepreneurs hard and undermining the effectiveness of insolvency proceedings for these crucial debtors and their creditors. This article reveals a proliferation of disputes concerning IP license rights and several salient challenges confronted by both licensors and licensees, debtors and non-debtors, in domestic and cross-border insolvency proceedings in US insolvency proceedings. The common root of these challenges seems to be legislation that did not foresee the rise of IP licensing as a mainstay of modern entrepreneurship. The simple common solution, and a guide for Australian regulators, is more careful consideration of non-obvious pitfalls in laws that preserve IP license rights in insolvency cases to maximise value not only for the parties involved, but for modern societies who increasingly depend on innovation and entrepreneurship.

Ostvarivanje saradnje u stečajnim postupcima sa elementom inostranosti - primer protokola

The paper deals with cross-border insolvency protocols as special source of insolvency law. Protocols are agreements between parties in insolvency procedure that deal with many significant questions in order to establish cooperation and coordination between participants. Protocols are used in cross-border insolvency proceedings in order to overcome differences between state legislation that can pose major obstacle for maximization of the value or efficient reorganization procedure. This instrument has special significance in cases of cross-border-group-insolvencies. Namely, in this case every subsidiary is a separate entity, but the preservation of economic value of the group as a whole calls for cooperation between insolvency practitioners and/or judges. The topic is especially interesting having in mind that European Insolvency regulation Recast explicitly mentions the use of protocols as means of cooperation (Recital 49). This will most definitely have broader implications on insolvency laws of civil law countries and it will contribute to wider use of protocols in these countries.

Rozhodujúce právo podľa prepracovaného znenia nariadenia o insolvenčnom konaní

The author in the article entitled “Applicable law under the recast of regulation on insolvency proceedings” analyses selected issues relating to the applicable law under the Regulation (EU) 2015/848 of the European parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) in the field of third parties´ rights in rem, set-off, reservation of title, contracts relating to immoveable property, payment systems and financial markets, contracts of employment, rights which are subject of registration, industrial rights, detrimental acts and effects of insolvency proceedings on pending lawsuits or arbitral proceedings. The author also refers to the related decisions of Court of Justice of the European Union and problems which occurred in the application practice. The aim of the article is to analyse the issue of applicable law under the recast of the regulation of insolvency proceedings relating to cross-border insolvency proceedings in member states of the European Union.

Are Bangladesh, India and Pakistan Ready to Adopt the UNCITRAL Model Law on Cross-Border Insolvency?

The development of business laws in key markets has not kept pace with the exponential growth of foreign investment they have experienced. Countries such as Brazil, Russia and China either do not consider the issue of cross-border insolvency in their legislation or they explicitly provide for a ‘territorialist’ approach to cross-border insolvency proceedings, whereby each country grabs local assets for the benefit of local creditors, with little consideration of foreign proceedings. This has led to uncoordinated, expensive attempts at cross-border reorganisation. The UNCITRAL Model Law on Cross-Border Insolvency (1997) was adopted with the objective of modernising international insolvency regimes and enhancing cross-border cooperation. In its 19 years of existence, it has been adopted by 41 countries in a total of 43 jurisdictions but by none of the BRIC states or the ‘Next-11’ nations of Bangladesh and Pakistan. While it has entered into policy-level discussion in China, India and Russia, it would seem that there is still scepticism regarding the efficacy and suitability of the Model Law for adoption into their national systems. This paper seeks to establish whether the Model Law can adequately plug, what Steven Kargman calls, ‘the glaring gap in the international insolvency architecture’, looking particularly at the context of the South Asian states of India, Bangladesh and Pakistan. It will question whether its adoption will improve the ability of these jurisdictions to handle the challenges of cross-border insolvencies, especially in light of their existing legal landscape, their market policy objectives and the existing alternatives available to the Model Law. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd.

The Debtor’s Property Selling in the Cross-Border Insolvency Proceedings

Abstract The title of this research is “The debtor’s property selling in the cross-border insolvency proceedings”. The insolvency proceeding gets the cross-border status also in case, if a debtor is an owner of the property outside of the main interests’ centre, namely, in another country. Therefore, there are many problematic cases when insolvency administrator (also called insolvency practitioner) defines the real estate in this other country and has to make a decision concerning the methods of selling the real estate in accordance with the law of the Member State in which territory the insolvency proceedings have been started. At the same time, the administrator shall provide that the property is sold in particular with regard to procedures for the realization of assets defined in the legislation of that country, where such real estate has been located. The article’s aim is to give a view of the features of the sale of the property in the insolvency proceedings and to define the possible lack and improvements in the cross-border insolvency concerning the selling of a debtor’s property. The European Parliament and the Council of the European Union has adopted Regulation (EU) 2015/848 of 20 May 2015 on Insolvency proceedings, which shall apply from 26 June 2017, with some exceptions Despite the regulation of the cross-border insolvency has been improved, the procedure of the property disposal is still incomplete in the cross-border insolvency proceedings. Within the study the following research methods are applied: the analytical method, comparative method, sociological method and descriptive method. The predicted value of the research is theoretical and also practical. The research should be useful for the insolvency proceedings administrators, the companies and the banks, other experts involved in the cross-border insolvency proceedings, as well as for students to improve their theoretical knowledge about the cross-border insolvency.

Derivatives in Cross-Border Insolvency Proceedings

As regards close-out netting provisions and financial collateral arrangements, one of the main consequences of the recent financial crisis has been the review of the privileged status of these instruments. This paper describes, in general terms, these changes and analyzes the policy underlying them, in particular in relation to the conflict-of-laws dimension. The EU legislation will be used as an example of this relative change of paradigm. Since these changes have been inspired by supranational institutions, the analysis may also be applicable mutatis mutandi to others jurisdictions.

Private International Law Rules in the Insolvency Regulation Recast: A Reform or a Restatement of the Status Quo?

The European Parliament, after a lengthy debate, has eventually approved a reform of Regulation 1346/2000 on cross-border insolvency proceedings (hereinafter, the ‘Insolvency Regulation Recast’), which provides for significant innovations of the original Regulation, such as a EU-wide register of insolvencies and a new proceeding for insolvencies of corporate groups. The fundamental logic of the Regulation, however, does not change: the Recast does not harmonise insolvency rules at EU level and its goal is still selecting competent venues and applicable insolvency regimes. In many respects, the reform simply codifies CJEU’s case law, with the aim of increasing legal certainty. The Insolvency Regulation Recast is however innovative regarding the definition of COMI, by repealing the causality relation between criterions of ‘permanence’ and ‘ascertainability’. Eventually, the Recast aims at better coor- dinating secondary proceedings and main proceedings; in this regard, it introduces ‘synthetic secondary proceedings’, whereby the insolvency practitioner of a main proceeding undertakes to respect other Member States distributional criterions in order to avoid the opening of a secondary proceeding. The real impact of these innovations is however uncertain.

Private International Law Rules in the Insolvency Regulation Recast: A Reform or a Restatement of the Status Quo?

The European Parliament, after a lengthy debate, has eventually approved an Insolvency Regulation Recast, which amends Regulation 1346/2000 on cross-border insolvency proceedings. The Recast provides for significant innovations of the original Regulation, such as a EU-wide register of insolvencies or a new proceeding for insolvencies of corporate groups. The fundamental logic of the Regulation, however, has not been changed: the Recast does not harmonise insolvency rules at EU level and its goal is still selecting competent venues and applicable insolvency regimes. In many respects, the Recast simply codifies CJEU’s case law, with the aim of increasing legal certainty. The Recast is however innovative regarding the definition of COMI, by repealing the causality relation between criterions of “permanence” and “ascertainability”. Eventually, the Recast aims at better coordinating secondary proceedings and main proceedings; in this regard, it introduces “synthetic secondary proceedings”, whereby the insolvency practitioner of a main proceeding undertakes to respect other Member States distributional criterions in order to avoid the opening of a secondary proceeding. The real impact of these innovations is uncertain and depends on how national case law will interpret and apply the new rules.

European Cross-Border Insolvency Regulation as a Tool Against Forum-Shopping

Forum shopping can be defined as the strategic ability offered to companies or individuals to choose freely or through legal loopholes the jurisdiction that will hear the claims of any of the partiesBy Issuing EC Regulation 1346/2000, the European Commission aimed at harmonising the field of cross-border insolvency proceedings by ensuring that corporate entities cannot “forum-shop” their way out of legislation.This Paper will analyse the theoretical framework of the Regulation and its consequences with regards to applicable jurisdiction in the admitted context of the prevention of forum-shopping.

Retracted: The inter‐relationship between intellectual property and international insolvency

AbstractThe following article from International Insolvency Review, “The inter‐relationship between intellectual property and international insolvency” by Bashar H. Malkawi, published online on 13 Jan 2010 in Wiley InterScience (www.interscience.wiley.com), has been retracted by agreement between the author, the journal editor, and John Wiley & Sons. The retraction has been agreed due to significant overlap between this and another paper: “The fate of intellectual property assets in cross‐border insolvency proceedings” by Nadine Farid published in Gonzaga Law Review, 44(1). Copyright © 2010 John Wiley & Sons, Ltd.

European Communication and Cooperation (‘CoCo’) Guidelines for Cross-border Insolvency Proceedings

In this contribution Willem van Nielen discusses the non-binding European Communication and Cooperation Guidelines for Cross-border Insolvency Proceedings, also known as the ‘CoCo’ Guidelines, that offer guidance on the application of the EC Insolvency Regulation.