Vol 10 (2013) - Issue 3

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An Irish Perspective on Insolvency Co-operation: The Re Flightlease Case

Introduction
The cross-border insolvency framework in Ireland contains a number of provisions in both corporate and personal insolvency (the latter also referred to as bankruptcy). However, apart from the situation of proceedings now covered by the European Insolvency Regulation 2000 ('EIR'), the situation of other judgments seeking recognition and enforcement and/or other forms of assistance appears to be bleak. Historically, although cross-border provisions were available in personal insolvency from an early date, assistance pursuant to these remained at the discretion of the court, which was not always forthcoming. In fact, it is of note that, despite the replacement of this early legislation by a more recent statute dealing with personal insolvency, assistance via orders in aid is only forthcoming on a mandatory basis for courts in the United Kingdom, the Isle of Man and the Channel Islands, while, for other courts, it is predicated on whether 'reciprocal facilities' are offered by the courts in a jurisdiction whence a request comes. The equivalent provisions in corporate legislation, dealing with the extension of winding up and examinership on the basis of requests for orders in aid, remain dead letters, due to no orders being in existence specifying which countries are to be extended assistance. As the UNCITRAL Model Law on Cross- Border Insolvency Proceedings 1997 ('Model Law') is also without effect in Ireland, such assistance that may be forthcoming has to be on the basis of the common law and its principles.
In this, the courts in Ireland have had a mixed history as to whether assistance is provided, although, given the paucity of cases, it may be unsafe to generalise as to whether the courts in Ireland are pro-cooperation or more reticent about granting recognition and assistance. A number of cases have in fact produced a positive result for cooperation. In Re Drumm, an Irish court held that an order in aid assisting a United States bankruptcy could be made on a number of factors being shown: the degree of equivalence between the foreign system and that in existence in Ireland, the existence of likely reciprocity between the courts as well as satisfaction of the broader tests for recognition based on comity as well as the inherent undesirability of there being a multiplicity of proceedings. This seems to reflect the positions in Re Bolton, an early case where the Irish courts came to the aid of bankruptcy proceedings taking place in South Africa, as well as in Banco Ambrosiano, where assistance via the recognition of foreign office holders and their entitlement to funds located in Ireland was forthcoming.