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Comparative Analysis of the Enactment and Interpretation of the Preamble and Chapter I of the Model Law on Cross-Border Insolvency—General Provisions

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Abstract

Chapters 6–10 identify where there is a significant variation in the domestic enactment of a provision of the Model Law or where that provision has not been enacted. They further examine how those provisions have been interpreted by the courts of those States.

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Notes

  1. 1.

    Re Sphinx Ltd, 351 BR 103, 112–4 (Bankr, SD NY, 2006).

  2. 2.

    United Nations Commission on International Trade Law, Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013) [20].

  3. 3.

    Article 1(2).

  4. 4.

    Cross-Border Insolvency Act 2008 (Cth) s 8.

  5. 5.

    Ibid.

  6. 6.

    Ibid.

  7. 7.

    Mason, see footnote 38, 217. Section 601CL is in Chapter 5B of the Corporations Act 2001 (Cth);

  8. 8.

    Cross-Border Insolvency Regulations 2008 (Cth) reg 4.

  9. 9.

    Ibid.

  10. 10.

    Ibid.

  11. 11.

    Companies Creditors Arrangement Act, RSC 1985, c C-36 s 61.

  12. 12.

    Cross-Border Insolvency Regulations 2006 SR 2006/1030 reg 36.

  13. 13.

    See Banking Act 2009 c 1, Parts 2, 3 and 4.

  14. 14.

    See Agreement on the European Economic Area [1994] OJ L 1/3 as amended.

  15. 15.

    Lastra, see footnote 43, 217 [9.41]; Ho, see footnote 75, 144–5.

  16. 16.

    E.g. Re Stanford International Bank Ltd [2011] Ch 33; Awal Bank BSC v Al-Sanea [2011] EWHC 1354 (Comm) (27 May 2011).

  17. 17.

    Lastra, see footnote 75, 218 [9.44].

  18. 18.

    11 USC § 1501(c)(2) (2012).

  19. 19.

    Selinda A Melnik, ‘United States’ in Ho, see footnote 75, 448.

  20. 20.

    11 USC § 561(d) (2012).

  21. 21.

    Companies Creditors Arrangement Act, RSC 1985, c C-36 s 2(1).

  22. 22.

    Ibid.

  23. 23.

    Companies Act 1993 ss 239F, 280.

  24. 24.

    The Cross-Border Insolvency Regulations 2006 SI 2006/1030, reg 2(b).

  25. 25.

    Roy Goode Principles of Corporate Insolvency Law (Sweet & Maxwell, 4th ed, 2011), 801 [16–27].

  26. 26.

    11 USC § 101 (2012).

  27. 27.

    Ibid § 1502(1).

  28. 28.

    Ibid § 101(15).

  29. 29.

    Williams v Simpson [2011] NZLR 380, 383.

  30. 30.

    US House of Representatives Committee on the Judiciary, United States Congress, Bankruptcy Abuse Prevention and Consumer Protection Act (8 April 2005), HR Report Pub L No 109–31, 107.

  31. 31.

    Re Betcorp Ltd, 400 BR 266, 280 (Bankr, D.Nev, 2009).

  32. 32.

    See, eg Rubin v Eurofinance SA [2010] 1 All ER (Comm) 81, 94 [46]; Re Betcorp Ltd 400 BR 266, 280 (Bankr, D Nev, 2009).

  33. 33.

    Eg in Rubin v Eurofinance SA ibid, the High Court recognised a US trust which was the subject of Chapter 11 proceedings. Trusts are not separate legal entities under English law and therefore could not be the subject of restructuring proceedings through an administration proceeding.

  34. 34.

    UNCITRAL has dealt differently with the issue of corporate groups and has issued the United Nations Commission on International Trade Law, Legislative Guide on Insolvency Law, Part three: Treatment of enterprise groups in insolvency UN Publication Sales No E.12.V.16.

  35. 35.

    See Re Lehman Brothers Holdings Inc, 422 BR 407 (Bankr, SD NY, 2010).

  36. 36.

    Regulation EC No 1346/2000 of the European Council on Insolvency Proceedings [2000] OJ L 160/1, Preamble 13.

  37. 37.

    Virgos & Schmidt, see footnote 26, [75].

  38. 38.

    Regulation EC No 1346/2000 of the European Council on Insolvency Proceedings [2000] OJ L 160/1. Article 3.1.

  39. 39.

    Ibid Article 3.2.

  40. 40.

    Re Stanford International Bank [2009] BPIR 1157; [2009] EWHC 1441 (Ch) (3 May 2009) [45].

  41. 41.

    Re Eurofood IFSC Ltd, [2006] Ch 508.

  42. 42.

    Re Stanford International Bank Ltd [2011] Ch 33.

  43. 43.

    Re Stanford International Bank Ltd [2011] Ch 33, 67 [54].

  44. 44.

    See comments under Article 17.

  45. 45.

    Cross-Border Insolvency Regulations 2006 SR 2006/1030.

  46. 46.

    Regulation EC No 1346/2000 of the European Council on Insolvency Proceedings [2000] OJ L 160/1, annex A.

  47. 47.

    See Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013) [70–72].

  48. 48.

    UNCITRAL Report of Working Group V (Insolvency Law) on the work of its forty-first session (New York, 30 April–4 May 2012) UN Doc A/CN.9/742 7–8.

  49. 49.

    See Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013) [69].

  50. 50.

    Ibid [70].

  51. 51.

    Zayed v Cook (2009) 62 CBR (5th) 114 (ONSC).

  52. 52.

    In the United Kingdom, privately appointed administrative receivers are practically no longer appointed as their appointment is terminated by the appointment of an administrator: Enterprise Act 2002 c40 sch 16 [41, 43].

  53. 53.

    Williams v Simpson [2011] 2 NZLR 380, 383.

  54. 54.

    [2011] Ch 33, [27].

  55. 55.

    Re ABC Learning Centres Ltd, 445 BR 318, 328 (Bankr, D Del, 2010) affirmed Re ABC Learning Centres Ltd 728 F 3d 301 (3rd Cir, 2013).

  56. 56.

    Re Betcorp Ltd 400 BR 266, 281 (Bankr, D Nev, 2009).

  57. 57.

    Re British American Insurance Co Ltd, 425 BR 884, 902 (Bankr, SD Fla, 2010).

  58. 58.

    Re Ashapura MineChem Ltd, 480 BR 129, 137 (Dist, SD NY, 2012).

  59. 59.

    Ibid 141.

  60. 60.

    Ho, see footnote 75, 160; Look Chan Ho ‘Misunderstanding the Model Law Insolvency: Re Stanford International Bank’ (2011) 26 Butterworths Journal of International Banking and Financial Law 395, 403.

  61. 61.

    The American Law Institute, see footnote 30, Rec 5.

  62. 62.

    See, eg, Re Magna Entertainment Corp (2009) 51 CBR (5th) 82.

  63. 63.

    See Re Probe Resources Ltd [2011] BCSC 552 [31–32].

  64. 64.

    See, eg, Board of Directors of Rizzo-Bottiglieri-De Carlini Armatori SpA as Debtor-in-Possession Of Rizzo-Bottiglieri-De Carlini Armatori SpA v Rizzo-Bottiglieri-De Carlini Armatori SpA [2013] FCA 157; Moore v Australian Equity Investors (2012) 30 ACLC 629; Re Graceway Canada Company (2011) 209 ACWS (3d) 555; [2011] ONSC 6262 (4 October 2011); Re Hartford Computer Hardware Inc (2012) 94 CBR (5th) 20; Re Pacific Northstar Property Group LLC [2009] NZHC 965 (29 September 2009); Rubin v Eurofinance SA [2010] 1 All ER (Comm) 81; Rubin v Eurofinance SA [2011] Ch 133.

  65. 65.

    See Re Vitro SAB De CV, 701 F 3d 1031, 1038 (5th Cir, 2012); Re Oas SA [2015] WL 4197076 (Bankr, SD NY, 2015).

  66. 66.

    Re Betcorp Ltd, 400 BR 266, 277 (Bankr, D Nev, 2009).

  67. 67.

    384 BR 34 (Bankr, D Mass, 2008).

  68. 68.

    United National Commission on International Trade Law Working Group V, The UNCITRAL Model Law on Cross Border Insolvency: the judicial perspective GA Res 66/96 A/CN.9/732 (1 July 2011).

  69. 69.

    Article 2(h).

  70. 70.

    Receiverships Act 1993 s 2(1).

  71. 71.

    Article 2(b).

  72. 72.

    See, eg, Mason, ‘Cross-border insolvency: Adoption of CLERP 8 as an evolution of Australian insolvency law’, see footnote 38, 218.

  73. 73.

    Companies Creditors Arrangement Act, RSC 1985, c C-36 s 2(1).

  74. 74.

    Bankruptcy and Insolvency Act, RSC 1985, c B-3.

  75. 75.

    11 USC § 1101 (2012).

  76. 76.

    Ibid.

  77. 77.

    Re Stanford International Bank Ltd [2011] Ch 33.

  78. 78.

    Re Betcorp Ltd, 400 BR 266 (Bankr, D Nev, 2009).

  79. 79.

    Re ABC Learning Centres Ltd, 445 BR 318 (Bankr, D Del, 2010).

  80. 80.

    Re Chow Cho Poon (Private) Limited [2011] 249 FLR 315, 325–6, [43–48].

  81. 81.

    Re Stanford International Bank Ltd [2011] Ch 33, 57, [24].

  82. 82.

    Ho, see footnote 75, 166,168; Sheldon, see footnote 146, 111–2 [3.35].

  83. 83.

    See, eg, Article 2(a); United Nations Commission on International Trade Law, Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013), [21, 25].

  84. 84.

    Re Betcorp Ltd, 400 BR 266 (Bankr, D Nev, 2009), adopted in Re ABC Learning Centres Ltd 728 F 3d 301 (3rd Cir, 2013).

  85. 85.

    Ibid, 277–8 (Bankr, D Nev, 2009).

  86. 86.

    Ibid 278.

  87. 87.

    Re JSC BTA Bank, 434 BR 334, 343 (Bankr, SD NY, 2010).

  88. 88.

    Re Stanford International Bank Ltd [2011] Ch 33, 60, [53–54], 93, [150].

  89. 89.

    Ibid 60 [53].

  90. 90.

    Ibid 93 [150].

  91. 91.

    See, eg, United Nations Commission on International Trade Law, Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013) [10, 11, 81, 82, 83, 87, 88, 141].

  92. 92.

    See, ibid [77].

  93. 93.

    See, eg, Neil Hannan, ‘International Commercial Arbitration and Cross Border Insolvency’ (2014) XVII International Trade and Business Law Review 447.

  94. 94.

    Cross-Border Insolvency Act 2008 (Cth) s 10.

  95. 95.

    Bankruptcy Act 1966 (Cth) s 27.

  96. 96.

    Bankruptcy and Insolvency Act, RSC 1985, c B-3 s 183; Companies Creditor Arrangement Act RSC 1985, c C-36 s 2(1) under definition of “court”.

  97. 97.

    Companies Creditor Arrangement Act, RSC 1985, c C-36 s 9(1).

  98. 98.

    Article 4(2).

  99. 99.

    28 USC §§ 151, 157, 1334 (2012).

  100. 100.

    11 USC § 1504 (2012).

  101. 101.

    See 11 USC appendix rr 9001–02.

  102. 102.

    Cross-Border Insolvency Act 2008 (Cth) s 8.

  103. 103.

    See, eg, Mason, ‘Cross-border insolvency: Adoption of CLERP 8 as an evolution of Australian insolvency law’, see footnote 38, 221; Explanatory Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 9 [18–19].

  104. 104.

    Companies Creditors Arrangement Act, RSC 1985, c C-36 s 56; Bankruptcy and Insolvency Act, RSC 1985, c B-3 s 279.

  105. 105.

    11 USC § 1505 (2012).

  106. 106.

    Eg in Australia, at present the arrival of boat people and the government attempts to stop it and secure Australia’s borders may be argued to be issues of public policy.

  107. 107.

    United Nations Commission on International Trade Law, Guide to Enactment of The UNCITRAL Model Law on Cross-Border Insolvency, UN Doc A/CN.9/442 (19 December 1997) as approved by GA Res A/RES/52/158 (1997) (30 January 1998) and amended by GA Res A/RES/68/107 (2013) (16 December 2013) [102].

  108. 108.

    Ibid [88–89].

  109. 109.

    Re Gold & Honey Ltd, 410 BR 357 (Bankr, ED NY, 2009).

  110. 110.

    Explanatory Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 21 [21]; Ackers v Deputy Commissioner of Taxation [2014] FCAFC 57 (14 May 2014) [40–41].

  111. 111.

    Ibid.

  112. 112.

    Re Ran, 607 F 3d 1017, 1021 (5th Cir, 2010) affirmed in Re Fairfield Sentry Ltd 714 F 3d 127 (2nd Cir 2013); Re Oas SA, 2014 WL 4197076 (Bankr, SD NY, 2015).

  113. 113.

    Re Ernst & Young Inc, as Receiver of Klytie’s Developments Inc, 383 BR 773, 781(Bankr, D Colo, 2008); Re Rede Engeria SA, 2014 WL 4248121 (Bankr, SD NY, 2014).

  114. 114.

    Re Ashapura MineChem Ltd 480 BR 129, 139 (Dist, SD NY, 2012).

  115. 115.

    Re ABC Learning Centres Ltd 728 F 3d 301, 309 (3rd Cir, 2013); Re Irish Bank Resolution Corporation Ltd 2014 WL 1884916 (Bankr, D Del, 2014).

  116. 116.

    Re Rede Engeria SA, 2014 WL 4248121 (Bankr, SD NY, 2014).

  117. 117.

    Re ABC Learning Centres Ltd 728 F 3d 301, 309 (3rd Cir, 2013).

  118. 118.

    Re Gerova Financial Group Ltd, 482 BR 86 (Bankr, SD NY, 2012).

  119. 119.

    Re Toft, 453 BR 186 (Bankr, SD NY, 2011).

  120. 120.

    Re Gold & Honey Ltd, 410 BR 357, 368–9 (Bankr, ED NY, 2009).

  121. 121.

    Re Fairfield Sentry Ltd 714 F 3d 127 (2nd Cir 2013) 140.

  122. 122.

    Re Qimonda AG, 433 BR 547, 570 (Dist, ED Va, 2010) affirmed Re ABC Learning Centres Ltd 728 F 3d 301 (3rd Cir, 2013); Jaffe v Samsung Electronics Company Ltd, 737 F 3d 14 (4th Cir, 2013).

  123. 123.

    Re Qimonda AG 462 BR 165, 185 (Bankr ED Va, 2011) affirmed Jaffe v Samsung Electronics Company Ltd, 737 F 3d 14 (4th Cir, 2013) indicating that it was appropriate to consider it under the balancing exercise of factors required under section 1522.

  124. 124.

    Re Ephedra Products Liability Litigation, 349 BR 333, 336 (Dist, SD NY, 2006); Re Iida, 377 BR 243, 259 (BAP, 9th Cir, 2007).

  125. 125.

    Re Gold & Honey Ltd, 410 BR 357 (Bankr, ED NY, 2009).

  126. 126.

    Ibid 364.

  127. 127.

    For example, a European subsidiary of a US based corporate group files Chap. 11 proceedings in respect of the group. The subsidiary whilst having assets in the USA does not have an establishment there and has its main business premises in Italy. The subsidiaries registered office is in the UK.

  128. 128.

    Sheldon, see footnote 146, 121 [3.70].

  129. 129.

    Melanie L Cyganowski and Lloyd M Green ‘The Evolving Application of the Public Policy Exception in Cross-Border Insolvencies’ (2013) 1 INSOL International 12, 13.

  130. 130.

    Steven Golick and Marc Wasserman, ‘Canada’ in Ho see footnote 75, 81. A similar comment could also be made with respect of the Bankruptcy and Insolvency Act, RSC 1985, c B-3 s 284.

  131. 131.

    11 USC § 1507(b) (2012).

  132. 132.

    Re Board of Directors of Telecom Argentina, 528 F 3d 162, 170 (2nd Cir, 2008); Re Rede Engeria SA, 2014 WL 4248121 (Bankr, SD NY, 2014).

  133. 133.

    Eg Re Lee 472 BR 156, 183 (Bankr, D Mass, 2012).

  134. 134.

    US House of Representatives Committee on the Judiciary, United States Congress, Bankruptcy Abuse Prevention and Consumer Protection Act, (8 April 2005) HR Report Pub L No 109–31, 109.

  135. 135.

    11 USC § 1509(f) (2012); Re Iida 337 BR 243 (BAP, 9th Cir, 2007).

  136. 136.

    Re Vitro SAB de CV, 701 F.3d 1031 (5th Cir, 2012).

  137. 137.

    Re Atlas Shipping A/S, 404 BR 726, 740 (Bankr, SD NY, 2009).

  138. 138.

    McGrath as Liquidators of HIH Insurance Ltd [2008] NSWSC 881 (26 August 2008), [17].

  139. 139.

    Rubin v Eurofinance SA [2013] 1 AC 236, 255 [27].

  140. 140.

    Schmitt v Deichmann [2012] 2 All ER 1217, 1232–3 [62–65].

  141. 141.

    See, eg, United Nations Commission on International Trade Law ‘The UNCITRAL Model Law on International Commercial Arbitration’ UN Doc A/57/172 GA Res 57/562 (19 November 2002), Article 2(1); United National Convention on Contracts for the International Sale of Goods, opened for signature 11 April 1980, [1988] ATS 32 (entered into force 1 April 1989), Article 7(1).

  142. 142.

    Sheldon, see footnote 146, 107 [3.22].

  143. 143.

    Wessels, Markell and Kilborn, see footnote 14, 208.

  144. 144.

    Explanatory Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 21.

  145. 145.

    11 USC § 1508 (2012).

  146. 146.

    TCL Air Conditioning (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 295 ALR 596, 599 [8] (French CJ and Gageler J).

  147. 147.

    Ackers v Saad Investments Company Limited (in liq) (2010) 190 FCR 285, 295 [45] referring to the Vienna Convention on the Law of Treaties 1969, opened for signature 30 November 1969, [1974] ATS 2 (entered into force in Australia 27 January 1980); Ackers v Saad Investment Company Ltd (in liq) (2013) 31 ACLC 493, 504 [35]; Gainsford v Tannenbaum (2012) 293 ALR 699, 707 [37]; Ackers v Deputy Commissioner of Taxation [2014] FCAFC 57 (14 May 2014) [43].

  148. 148.

    Re Stanford International Bank Ltd [2011] Ch 33, 57, [23].

  149. 149.

    Rubin v Eurofinance SA [2011] Ch 133, 160–1 [63].

  150. 150.

    Rubin v Eurofinance SA [2013] 1 AC 236.

  151. 151.

    Re Loy, 432 BR 551, 561, (Bankr, ED Va, 2010).

  152. 152.

    Ibid 624–5.

  153. 153.

    Re Loy, 432 BR 551, 560 (Bankr, ED Va, 2010).

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  1. Honorary Fellow, University of Western Australia and Partner, Thomson Geer, Melbourne, Victoria, Australia

    Neil Hannan B.Ec, LLB (Monash) Ph.D (UWA)

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Correspondence to Neil Hannan B.Ec, LLB (Monash) Ph.D (UWA) .

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Hannan, N. (2017). Comparative Analysis of the Enactment and Interpretation of the Preamble and Chapter I of the Model Law on Cross-Border Insolvency—General Provisions. In: Cross-Border Insolvency. Springer, Singapore. https://doi.org/10.1007/978-981-10-5876-9_6

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