Vol 10 (2013) - Issue 2

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The Limits of Co-operation at Common Law: Rubin v Eurofinance in the Supreme Court

Introduction
There is a long tradition in England and Wales of courts extending aid for the collection of assets located in the jurisdiction of the courts and that belong to foreign debtors or their estates in insolvency. The precept of assistance, first located within the law of personal insolvency (or bankruptcy), is said to derive from the doctrine relating to the law of personalty or movable property, by which personal assets were deemed to have no locality but were subject to the law governing the person of the owner. Despite early difficulties in relation to persons who had not committed acts of bankruptcy within the jurisdiction and in relation to real property interests, where the courts often declined to assume jurisdiction, the opening of proceedings involving foreign debtors began to be a regular feature in the case law, although the courts were not always inclined to give effect to foreign judgments in all cases. On similar lines, the courts created the ancillary winding up doctrine to give effect to assistance precepts in the case of corporate debtors. In embodying principles of assistance in the case of both personal and corporate insolvencies, the common law courts created the infrastructure which would later support the development and use of the statutory provisions that permitted ancillary liquidations as well as co-operation more generally. Where the statutes could not apply, the common law would continue to govern and its development would often match the scope of assistance under comparable cases involving the statutory framework. In more recent times, the adoption of new frameworks such as the UNCITRAL Model Law on Cross-Border Insolvency Proceedings 1997 (‘Model Law’) and European Insolvency Regulation 2000 (‘EIR’) have seen the extension of the principles created in the common law to clarify the scope of the frameworks and articulation with existing modes of assistance.
Into this complicated history of cross-border assistance came a case in 2006 that radically altered the way in which the common law conceived of insolvency orders. Historically, judgments in insolvency that were to be subject to recognition and enforcement using the principles of assistance created by the common law were not seen as distinct from other common law judgments and were thus to be recognised and enforced, even if willingly so by the courts in furtherance of the ideals of cooperation, as any other judgment given by a common law court and therefore had to comply with the ordinary common law rules in relation to judgments in personam and in rem.