18 July 2022
Disputes Quick Read – 88 of 87 Insights
Disputes Quick Read: UK government consults on potential new cross-border Model Laws
On 7 July 2022 the UK government launched a consultation on the implementation of two model laws adopted by the United Nations Commission on International Trade Law (UNICTRAL): the Model Law on Recognition and Enforcement of Insolvency-Related Judgments and the Model Law on Enterprise Group Insolvency. The government claims that the consultation signals the UK's 'ongoing commitment to mutual cooperation and international best practice' in cross-border insolvencies.
Background
The UK has previously implemented the UNICTRAL Model Law on Cross-Border Insolvency in the form of the Cross-Border Insolvency Regulations 2006 ("CBIR"). This Model Law has been enacted in 48 states across the world and provides a framework for those states to recognise and enforce foreign insolvency proceedings.
However, it is ambiguous in relation to the extent to which foreign insolvency judgments should be recognised and enforced which has resulted in different countries taking different approaches to the issue. In the UK, the Supreme Court has held that the CBIR does not extend to recognition of insolvency judgments whereas in the US, the Model Law (adopted in Chapter 15 of the Bankruptcy Code) is regarded as enabling the courts to recognise and enforce foreign insolvency judgments.
The Model Law on Cross-Border Insolvency also does not provide a framework for insolvencies of groups of companies in various jurisdictions which means that they are often conducted in a disjointed way.
Key proposals
The UK government believes that adoption of these two new Model Laws will go some way to addressing the gaps in the current Model Law regime.
Model Law on Recognition and Enforcement of Insolvency-Related Judgments:
- Because of concerns over the interaction of this Model Law with English law, the government proposes to implement only "Article X".
- Article X would supplement the CBIR by allowing courts to recognise foreign insolvency-related judgments as a form of relief (effectively overruling the UK Supreme Court decision in Rubin and another (Respondents) v Eurofinance SA and others [2012] UKSC 46 in this respect), but also meaning that it would be available only where a foreign insolvency proceeding has been recognised under the CBIR.
- The government also proposes to publish a non-exhaustive list of factors that a court may take into account when deciding whether or not to recognise a foreign judgment.
- The court will be required to have regard to public policy in the UK, but will retain its discretion as to the relief granted.
Model Law on Enterprise Group Insolvency:
- This Model Law aims to coordinate a group insolvencies by ensuring that group members can cooperate effectively in implementing a plan regardless of the jurisdictions in which they operate, including avoiding or minimising multiple parallel insolvency proceedings where possible.
- Corporate groups looking to utilise this regime in the UK will need to initiate a 'planning proceeding' by applying to court to commence the group plan alongside a qualifying UK insolvency process.
- The coordination of the planning proceeding will be carried out by a group representative.
- A group insolvency situation must be approved under the law of each relevant state.
- The enforcement of the group insolvency solution in the various jurisdictions is a matter for each jurisdiction. However, the government anticipates that the UK courts will consider whether a group insolvency solution will be effective in the relevant jurisdictions when reaching their decision on the group plan.
Comment
The (partial) adoption of the two proposed Model Laws should enhance the flexibility and reach of the UK's insolvency legislation. Article X will give the courts a framework to recognise foreign insolvency judgments where that might not have been possible under the existing insolvency regime.
However, the effectiveness of the Model Law on Enterprise Group Insolvency will depend partly on how many countries follow the UK's lead and implement the Model Law. If uptake is low, then the impact is likely to be limited.
The government anticipates that it will implement the Model Law on Enterprise Group Insolvency as soon as possible. Both Model Laws could be implemented fairly quickly given they do not require an act of parliament to be given effect.
The consultation closes on 29 September 2022.
Find out more
To discuss the proposals in more detail, please contact a member of our Restructuring & Insolvency team.
In this series
New SFO Director announces bold plans to tackle fraud
21 March 2024
by Multiple authors
First of its kind judicial guidance on the use of AI in the courts
14 December 2023
Witness familiarisation - does it affect the court's assessment of witness credibility?
13 December 2023
The use of AI in Trial Witness Statements post-PD 57AC
23 October 2023
by Multiple authors
CAT to hear the first application for a collective settlement approval order
17 October 2023
Failure to prevent fraud – a new offence?
14 August 2023
by Multiple authors
Supreme Court rules that APP fraud victims cannot rely on Quincecare Duty
4 August 2023
by Multiple authors
The Law Commission's Consultation Process on the Arbitration Act 1996 – taking stock
21 July 2023
What does the latest decision of the CAT in the Mastercard/Visa proceedings mean for class actions?
10 July 2023
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
1 June 2023
by Multiple authors
Disputes Quick Read – developments in the fixed costs regime
3 May 2023
by James Bryden
Disputes Quick Read: Service by email – are the rules any clearer?
20 April 2023
by James Bryden
Disputes Quick Read - What do practitioners think about making alternative dispute resolution (ADR) compulsory?
8 March 2023
Disputes Quick Read: What are the litigation trends for 2023?
2 March 2023
Disputes Quick Read: further guidance on witness statement preparation rules
14 February 2023
Disputes Quick Read: A cautionary tale – settlement agreement (un)wittingly releases all claims for fraud
13 February 2023
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
8 February 2023
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
19 January 2023
Disputes Quick Read: A new approach to giving evidence? WhatsApp with that?
3 October 2022
Disputes Quick Read: Ethereum Merge - what legal issues arise?
22 September 2022
by Ben Jones, Emma Allen
Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
9 August 2022
by Nick Maday
Disputes Quick Read: Disclosure - What information can be redacted?
25 July 2022
Disputes Quick Read: what claims exist when a smart contract is breached?
6 July 2022
by Emma Allen
Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
Welcome news for those pursuing fraud claims in the English Courts
28 July 2022
Disputes Quick Read: Defining the duty - the limits of the responsibility assumed by professionals
27 July 2022
by Stuart Broom
Disputes Quick Read: Climate change litigation – successful challenge to government's Net Zero Strategy
29 July 2022
Disputes Quick Read: Judicial Review and Courts Act 2022 – now in force
17 June 2022
Disputes Quick Read: an important reminder of the duty to disclose electronic documents in native format
13 June 2022
Disputes Quick Read: ENRC prevails in claim against former solicitor
26 May 2022
Disputes Quick Read: Climate change litigation update – McGaughey v Universities Superannuation Scheme Limited
31 May 2022
by Multiple authors
Don't lose your keys: Bitcoin developers do not have a duty to assist owners in recovering lost cryptocurrency
4 April 2022
Disputes Quick Read: The new witness statement preparation rules – a year on
5 April 2022
Disputes Quick Read: ClientEarth v Shell – climate change litigation shifts focus to UK companies
31 March 2022
by Multiple authors
Disputes Quick Read: High Court rules that failure to provide adequate data security is not a positive act
21 September 2021
by Multiple authors
Disputes Quick Read: Key changes to the Disclosure Pilot Scheme
13 September 2021
Disputes Quick Read: Judicial Review and Courts Bill – unpacking the UK government's proposed amendments
6 September 2021
Disputes Quick Read: Will litigants be compelled to participate in alternative dispute resolution?
2 August 2021
Disputes Quick Read: Freezing injunctions – maximum custodial sentence imposed for breach
21 July 2021
Disputes Quick Read: The online future of civil justice – the end of the legal profession or the end of legal drudgery?
15 July 2021
Disputes Quick Read: Will the courts change forever post-COVID?
26 May 2021
Disputes Quick Read: One Blackfriars administrators cleared of misfeasance
5 May 2021
Disputes Quick Read: Not your prerogative – the Independent Review of Administrative Law reports its recommendations on judicial review
21 April 2021
Disputes Quick Read: Amendments to the Disclosure Pilot Scheme – a step in the right direction
31 March 2021
Disputes Quick Read: UK Supreme Court rules on the territorial extent of the SFO's powers
26 February 2021
Disputes Quick Read: No dropping anchor – parent company liability for environmental claims
24 February 2021
Disputes Quick Read: What lawyers need to know about new witness statement preparation rules
20 January 2021
Disputes Quick Read: Should you still choose the English courts to have jurisdiction in your international contracts after Brexit?
12 January 2021
by Tim Strong
Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)
23 November 2020
Disputes Quick Read: Law on interest applicable to US dollar awards reaffirmed
16 October 2020
Disputes Quick Read: Care required when drafting SPA claim notices
23 September 2020
by Multiple authors
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
7 October 2020
by Nick Storrs
Disputes Quick Read: COVID-19 and supply chain disruption – key issues
9 April 2020
by Multiple authors
Disputes Quick Read: High Court orders parties to explore options for 5-week remote trial
15 April 2020
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
27 April 2020
by Multiple authors
Disputes Quick Read: UK's OFSI fines Standard Chartered Bank £20 million for sanctions breaches
21 April 2020
Disputes Quick Read: A different approach to witness evidence
11 March 2020
by James Bryden
Disputes Quick Read: Coronavirus - a growth in virtual courts?
17 March 2020
by Stuart Broom
Disputes Quick Read: Embracing remote hearings – the experience to date
26 March 2020
by Multiple authors
Disputes quick read: climate change activism by litigation
26 February 2020
Disputes Quick Read: Commercial Court's arbitral power shift
21 February 2020
Disputes Quick Read: Court stays evictions during COVID-19 – is this lawful?
2 June 2020
Disputes Quick Read: Will the civil justice system change forever post COVID-19?
16 June 2020
Disputes Quick Read: Retailers reign supreme in Visa and Mastercard proceedings
9 July 2020
Disputes Quick Read: The contra proferentem rule reconsidered?
21 July 2020
Disputes Quick Read: Scope of duty and the SAAMCo counterfactual following Manchester Building Society
3 December 2021
Disputes Quick Read: Facilitating transactions in cryptoassets - Lord Leggatt and the point of commercial law
24 November 2021
by Stuart Broom
Disputes Quick Read: Privy Council clarifies the law on freezing injunctions in aid of foreign proceedings
8 October 2021
Disputes Quick Read: Climate change litigation – what's the latest?
10 January 2022
Disputes Quick Read: Court decisions on the Disclosure Pilot Scheme – the 2021 roundup
20 January 2022
Disputes Quick Read: Assumption of responsibility - tax schemes and investors
22 March 2022
Disputes Quick Read: Dealing in crypto? Be careful what you call it
7 April 2022
by Multiple authors
Related Insights
UK Jurisdiction Taskforce to consult on digital assets and English insolvency law
Avanti's satellites not floating, but fixed security according to English court
Insolvencies surge in England and Wales as pressure mounts on businesses
by multiple authors