Vol 15 (2018) - Issue 5

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Universally Territorial: Recognisable?

Synopsis
Questions around the extent to, and conditions under, which foreign insolvency proceedings and judgments should be given effect in jurisdictions outside that in which they are being conducted are increasingly the subject of debate as a consequence of the progressively international nature of insolvency law; and fall within one of the areas being considered by the UNCITRAL Model Law working group.
For example, the principle in Antony Gibbs & Sons v La Société Industrielle et Commerciale des Métaux (the 'Gibbs rule'), which broadly provides that a debt governed by one law cannot be discharged or compromised by a foreign insolvency proceeding under another law, will soon be put under the microscope in an appeal from a decision in the English High Court.
Similarly, whilst the place of incorporation is frequently considered the appropriate forum for the winding up of a company, the prevalence of offshore incorporated holding vehicles for operations headquartered in financial centres like Hong Kong gives rise to recognition considerations and the need to utilise the available regime most appropriate to the circumstances.
This article reviews certain courts’ recent approach to these issues, touching on certain developments in cross border insolvency in England, Hong Kong and, by extension, certain Caribbean jurisdictions.