Legislation
International

 
The Cross-Border Insolvency Regulations 2006

On 30th May 1997 the United Nations Commission on International Trade Law (“UNCITRAL”)adopted the text of a model law on cross-border insolvency, which was approved by a resolutionof the United Nations General Assembly on 15th December 1997. These Regulations give effect tothe model law in Great Britain.

On 30th May 1997 the United Nations Commission on International Trade Law (“UNCITRAL”)adopted the text of a model law on cross-border insolvency, which was approved by a resolutionof the United Nations General Assembly on 15th December 1997. These Regulations give effect tothe model law in Great Britain.

Regulation 2 of the Regulations provides that the UNCITRAL model law shall have the force oflaw in Great Britain in the form set out in Schedule 1 to the Regulations (the Model Law) andprovides that in interpreting the Model Law the courts can have regard to other documents includingthe Guide to Enactment of the Model Law published by UNCITRAL (ISBN 92-1-133608-2).The model law and Guide may be accessed at http://www.uncitral.org/uncitral/en/uncitral–texts/insolvency/1997Model.html.

Chapter I of the Model Law contains General Provisions (articles 1 to 8). Article 1 sets out the scopeof application of the Model Law, which may apply in a number of cross-border situations, and alsolists certain bodies to which the Model Law does not apply. Article 3 of the Model Law clarifiesthat Council Regulation (EC) No. 1346/2000 of 29th May 2000 on Insolvency Proceedings prevailsover the Model Law.

Chapter II (articles 9 to 14) relates to the access of foreign representatives and creditors to courts inGreat Britain and their rights to participate in an insolvency proceeding in Great Britain.

Chapter III of the Model Law deals with recognition of foreign proceedings and relief. Articles 15to 17 set out criteria for determining whether a foreign proceeding is to be recognised and, if sowhether as a foreign main proceeding or as a foreign non-main proceeding (see articles 16, 17 anddefinitions in article 2).

Articles 19 to 21 set out the effects of recognition and the relief available to a foreign representative.The relief accorded upon recognition of a foreign main proceeding is listed in article 20(1). Article 21of the Model Law provides for the court to grant discretionary relief for the benefit of any recognisedforeign proceeding, whether main or non-main. Urgently needed relief may be granted by the courton an interim basis pending a decision on recognition (article 19).

Chapter IV of the Model Law provides for the British courts and British insolvency officeholdersto cooperate with foreign courts or foreign representatives in the areas covered by the Model Law(articles 25 to 27).

Chapter V of the Model Law (articles 28 to 32) provides for the coordination of a British insolvencyproceeding and a foreign proceeding concerning the same debtor and facilitates coordinationbetween two or more foreign proceedings concerning the same debtor.

Schedule 2 to the Regulations sets out procedural matters in relation to proceedings under theModel Law in England and Wales. Parts 2 to 5 of the Schedule contain details of the form andcontent of specified applications under the Model Law and Part 6 sets out more detailed proceduralrequirements in respect of those applications. Part 7 of Schedule 2 provides for applications tobe made in appropriate cases to the Chief Land Registrar in connection with court orders underthe Regulations. Part 8 provides for a summary remedy against foreign representatives guilty ofmisfeasance. Parts 9 to 12 contain general provision as to court procedure and practice and appealsin connection with proceedings under the Regulations, costs and other general matters.

Schedule 3 of the Regulations sets out miscellaneous procedural matters in relation to proceedingsunder the Model Law in Scotland.

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Ben LuxfordBen Luxford
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