Vol 20 (2023) - Issue 5

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The UK’s Adoption of the UNCITRAL Model Laws on the Recognition of Foreign Judgments and Enterprise Group Insolvencies

Synopsis
On 7 July 2023 the UK government's Insolvency Service published its response to a consultation launched a year earlier, in July 2022, on changing the law to partially implement the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (the 'Judgments Model Law') and to implement the Model Law on Enterprise Group Insolvency (the 'Group Insolvency Model Law', together with the Judgments Model Law, the 'Proposed Model Laws'). The consultation itself was covered in an article by Kate Stephenson in International Corporate Rescue, volume 19 issue 5. In this article we explain the conclusions of the consultation and the way ahead for the Proposed Model Laws. We also seek to highlight some of the interesting questions that arise in relation to the workability and meaningfulness of the Proposed Model Laws.
The government intends to introduce legislation to implement the Group Insolvency Model Law at the earliest opportunity. No country has yet implemented the Group Insolvency Model Law, and, therefore, its immediate impact is likely to be rather limited. However, over 40 countries have implemented the Cross-Border Model Law, which suggests that several countries may follow the UK's lead.
In relation to the Judgments Model Law, while the government remains of the view that enacting it will enhance the UK's highly regarded insolvency regime and that the approach of adopting through the Article X route is the correct route, the government will continue to develop the detail of the implementation proposal, to ensure that issues that have been raised (foremost: the rule in Gibbs) are resolved before proceeding.