Vol 9 (2012) - Issue 5

Article preview

A Final Step in Shaping Rules for Cooperation in International Insolvency Cases

Introduction
Two years ago, under the title 'A First Step in Shaping Rules for Cooperation in International Insolvency Cases', we were able to report on the progress of drafting a set of Global Principles for Cooperation in International Insolvency Cases. Courts all over the world are increasingly involved in cross-border insolvency cases. More recently in cases regarding swindlers such as Allen Stanford and Bernard Madoff insolvency proceedings are pending in 4 and 8 countries respectively. In other cases courts all over the globe, working in different time zones, are dealing with procedural and legal disputes in over 15 countries, e.g. in Nortel Networks or Lehman Brothers. There is hardly any national or regional legislation dealing with the procedural alignment of these cases pending in so many countries. In the absence of clear legal rules the American Law Institute (ALI) and the International Insolvency Institute (III) have sponsored a global research project, in an aim to create 'Global Principles for Cooperation in International Insolvency Cases'. The research has been conducted by us over a period of some six years, having been assisted by a group of some 100 academics, practitioners, judges and regulators from around 30 jurisdictions all over the world. Recently the final report has been presented to ALI and the membership of III has unanimously approved the report during its 12th Annual conference.
In our article of 2010 we explained the background and purposes of this project. We are now able to report on its results. The Global Principles reflect a non-binding statement, drafted in a manner to be used both in civil-law as well as in common-law jurisdictions, and aim to be applicable in all jurisdictions in the world. The Global Principles comprise:
– 37 Global Principles for Cooperation of International Insolvency Cases, these include principles covering the court’s case management in international cases, rules on due process, equal treatment of creditors, the choice of languages to use, communication and coordination between proceedings or in transnational reorganisation;
– 18 Global Guidelines for Court-to-Court Communication in those cases;
– a list of over 150 terms and expressions with definitions to promote the development of a uniform global legal terminology in matters relating to insolvency and therefore to assist insolvency practitioners and courts in their efforts of improving the components to smoothen cross-border communication and coordination; and
– in an Appendix, a Bibliography with sources from some eight or nine jurisdictions and a Statement of the Reporters with 23 Global Rules on Conflict of Laws Matters in International Insolvency Cases.

The research has considered many internationally generated texts of soft law and best practices, produced by institutions such as the World Bank, UNCITRAL, UNIDROIT (the International Institute for the Unification of Private Law), INSOL Europe and the Asian Development Bank. In this way it is hoped that the final text embodying the Global Principles will obtain the approbation of governmental authorities, domestic and international organisations, practitioners, and (most importantly) courts in their approach to the conduct of international insolvency matters in the future.