This is a chapter from the Bloomsbury Professional book Cross Border Insolvency, 3rd Edition, which provides insolvency practitioners with specialist guidance on the particular problems which apply in cross-border insolvency. This is increasingly necessary for professionals in the area with insolvency issues now regularly extending across national borders. The 3rd edition of this acclaimed book has been extensively revised and updated to provide a practical analysis of the fundamental changes to cross-border insolvency law and practice in England as result of the European Insolvency Regulation, as well as the Cross Border Insolvency Regulations 2006 which implemented the UNCITRAL Model Law on Cross-Border Insolvency. With illustrations at the end of each chapter showing how to avoid practical problems, this thoroughly researched text gives an insight into the impact and potential difficulties of the law, enabling the practitioner to anticipate problems before they arise.
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Table of Contents
Richard Sheldon QC
1.1 Whilst the law on cross-border insolvency may be regarded as highly topical as a result of a series of spectacular collapses over the last twenty years (BCCI, Maxwell, Barings, Lehman, Stanford and Madoff, to name but a few), it is firmly rooted in history and the development of international trade. Prior to the development of statutory bases of jurisdiction, English courts grappled with the issues raised on a case-by-case basis, and there was an incremental, if not always smooth, development of the common law.
1.2 Thus, as long ago as the eighteenth century, in the landmark decision of Solomons v Ross,[1] Bathurst J had to consider the competing rights of foreign assignees and English creditors. On 18 December 1759, a firm of merchants in Amsterdam stopped payment. Two days later, Ross, an English creditor, by a foreign attachment in the Lord Mayor's Court garnished a debt owing to the debtors. On 2 January 1760 the Chamber of Desolate Estates in Amsterdam appointed curators (or assignees) of the debtors' property. In March 1760, it was determined by Bathurst J, sitting for the Lord Chancellor, that the bankruptcy had vested all the firm's movable assets, including debts owed by the bankrupts' English debtors, in the Dutch assignees and that Ross should give up the benefit of the attachment to the assignees, but without prejudice to the defendant Ross coming in as a creditor of the bankrupts. Thus, from an early stage, English courts were prepared to recognise and give effect to foreign insolvency proceedings taking place in the jurisdiction in which the debtor was domiciled, in order to avoid the confusion and conflict which would arise if creditors were permitted to circumvent, by recourse to legal rights available in England, the effect of the insolvency proceedings taking place under such foreign law. This reflected in embryonic form what has now been described as a principle of 'universalism', namely that there should ideally be only a single insolvency proceeding in relation to a debtor in which all creditors are entitled and required to prove.
1.3 English courts similarly sought from an early stage to protect the effective administration of insolvency proceedings taking place in England. Nearly two decades before the decision in Solomons v Ross, Lord Hardwicke had considered the position of English assignees in bankruptcy where a creditor had sought satisfaction of his debt by attaching the bankrupt's assets out of the jurisdiction. In Mackintosh v Ogilvie,[2] an English creditor, who had arrested the bankrupt's effects in Scotland, was restrained at the instance of English assignees by a writ of ne exeat regno, the Lord Chancellor observing:
'I cannot grant an injunction or prohibition to the Court of Session, but I will certainly restrain the party. I will not permit a creditor here to gain such a priority, to pass by the commission of bankruptcy, go into Scotland or Holland, where arrestments are suffered, and arrest debts there, etc, to obtain a preference, and evade the laws of bankruptcy here.'
The development of the common law in protecting the administration of an English insolvency proceeding appears from the cases considered in Chapter 14.
1.4 During the nineteenth century, as discussed in more detail in Chapter 9 ('Recognition of Foreign Bankruptcies at Common Law'), English courts recognised the vesting of movable property in foreign trustees or assignees in bankruptcy appointed in jurisdictions where the debtor was domiciled, enabling those assignees to come before English courts to recover such property. Even in the case of immovables where there was no automatic vesting, English courts exercised a discretion to assist the foreign trustee by enabling him to obtain title to or otherwise deal with property. Although, in corporate insolvency, there was generally no question of automatic vesting of property in some other person, English courts similarly recognised the person empowered under the foreign insolvency law of the jurisdiction where the company was incorporated to act on behalf of the insolvent company.
1.5 As developed in more detail in the chapters later in this work dealing with foreign corporate insolvencies (in particular, Chapters 6 and 7), recognition in appropriate cases entailed not only allowing such a person to come before English courts to recover property, but also the 'active assistance of the court'. But assistance was not automatic. The scope and fairness of the foreign proceedings, the potential prejudice to domestic creditors and whether the assistance would be contrary to the substantive laws of England would be taken into consideration. This reflected what has now been described as a principle of 'modified universalism' discussed later in this work.
1.6 Assistance was also provided by the English courts in cases where there were parallel insolvency proceedings in England and in the place of the debtor's domicile or place of incorporation. Such parallel insolvency proceedings were possible because of the jurisdiction of the English courts to open insolvency proceedings in respect of foreign individuals (discussed in Chapter 8) and foreign companies (discussed in Chapter 5). The potentially wide statutory basis for exercising such jurisdiction has been limited by the exercise of 'judicial restraint' on now well-developed principles based on a number of cases in the last century or so. But where the jurisdiction was exercised, the insolvency proceedings were, at least theoretically, universal in their effect. Thus, all the assets of the debtor (individual or corporate), wherever in the world they might be situate, were from an English perspective to be administered in the insolvency proceedings, and all creditors, including foreign creditors (save in respect of foreign revenue or penal claims) were entitled to prove. But theory had to give way to reality, because such English insolvency proceedings might not be recognised or given effect abroad. This arose particularly in a case where insolvency proceedings abroad had been opened in the debtor's place of incorporation (in the case of companies) or domicile (in the case of individuals). The reality of the position was reflected by the approach developed by the English courts in cases which treated the English insolvency proceedings as 'ancillary' to the proceedings abroad (see Chapter 7). (As to concurrent bankruptcies, see the last section of Chapter 9.) Whilst this approach might be characterised as one which developed on a pragmatic basis, it also bears features of 'modified universalism' in the sense described above.
1.7 Until the early twentieth century, issues of recognition and enforcement of foreign insolvency proceedings, and co-operation with foreign courts and office-holders, were largely dealt with by the courts through the development of the common law. By section 122 of the Bankruptcy Act 1914[3] (which was an Imperial Act), it was provided that the courts of Great Britain and Ireland and every 'British court' (which included colonial courts) which had jurisdiction in bankruptcy, and the officers of those courts, should 'severally act in aid of and be auxiliary to each other in all matters of bankruptcy'. Whilst this was a significant step forward in the field of cross-border insolvency, its limitations were obvious. It only extended to colonial courts – but trade (and insolvencies) did not stop there – and it only applied in bankruptcies, not corporate winding up. There was no significant development in statute dealing with cross-border insolvencies until the Insolvency Act 1986 ('IA 1986').
1.8 IA 1986 was enacted following the report of the Review Committee chaired by Sir Kenneth Cork.[4] Cross-border insolvency was considered in chapter 49, a mere three pages of the 460-page report (largely because of the Review Committee's limited terms of reference). It is nevertheless instructive to consider how the Review Committee summarised the position in its report presented in June 1982:
'1902. The Courts of England and Wales have always exercised some measure of extra-territorial jurisdiction in respect of insolvency matters with a view to achieving fairness for all the insolvent's creditors everywhere. The aim is as follows:
(a) to avoid conflict and confusion in cases of concurrent jurisdiction, that is, where insolvency proceedings have been commenced against an individual debtor or insolvent company in more than one country or jurisdiction;
(b) to ensure that orders in and judgments of the Courts of this country in insolvency matters are recognised and enforced by the courts and authorities of other countries and jurisdictions; and
(c) to ensure, where this is not repugnant to our own domestic concepts of public policy, that orders and judgments of the courts of other countries and jurisdictions are enforced in England and Wales.
1903. The statutory provisions governing this branch of United Kingdom law were largely devised in the Victorian era during the heyday of Imperial supremacy. They have never been reviewed or overhauled in the light of modern constitutional developments and as a result make a totally inadequate contribution to the structure of international commercial life in the context of insolvency …'
1.9 A number of comments may be made about this passage. It is important to stress that what is set out in paragraph 1902 is only the 'aim' of the approach of the English courts. As will become apparent from the later chapters of this work, the aim was not necessarily achieved in practice or given effect in the decided cases. Further, the apparent simplicity of the aim, as set out in (b) and (c) in particular, does not adequately reflect the real difficulties in law and in practice of achieving such aim. The aim set out in (a) has been widely recognised, but how it is to be achieved in practice is now at the centre of the debate about 'universalism' (ie that there should ideally be only a single insolvency proceeding in relation to a debtor in which all creditors are entitled and required to prove) and 'modified universalism' which is developed later in this work.
As to the passage in paragraph 1903, the position fortunately has moved on, to a very considerable extent, as a result of developments in the last 25 years or so which appear from the following sections of this chapter.
1.10 The principal sources of modern cross-border insolvency law as regards recognition and enforcement of foreign insolvency proceedings, and co-operation between courts and office-holders, are as follows:
(1) the EU Regulation on insolvency proceedings[5] ('the Insolvency Regulation') – see Chapter 2;
(2) the UNCITRAL Model Law, as incorporated into the law of Great Britain with certain modifications to adapt it for application in Great Britain by the Cross Border Insolvency Regulations 2006 ('CBIR')[6] ('the Model Law') – see Chapter 3;
(3) section 426 of IA 1986 – see Chapter 4; and
(4) the common law (see Chapters 6, 7 and 9–11), which has also developed principles of protection for English insolvency proceedings – see Chapter 14.
1.11 The Insolvency Regulation also contains mandatory rules on the allocation of jurisdiction to open insolvency proceedings.
Subject to the rules on allocation of jurisdiction to be found in the Insolvency Regulation, if applicable, the law on the general jurisdiction of the English courts to institute insolvency proceedings against foreign debtors, corporate and individual, is to be found in certain provisions of IA 1986 and in relevant case law (see Chapters 5 (corporate) and 8 (individual)).
As to the enforcement of judgments and orders made in foreign insolvency proceedings, all of the sources of law described above, as well as additional statutes, are potentially applicable (see Chapter 12).
The effect in England of a discharge of debts by a foreign insolvency proceeding is principally a matter governed by English rules of private international law (see Chapter 13). Questions of priority and set-off are governed by a combination of common law and statute (see Chapter 15).
1.12 The question posed in the heading of this section does not admit of an easy answer, as the issues which might arise are infinite and variable in complexity. Further, a particular source of law might not provide a complete answer, and it may be necessary to have regard to more than one source of law to resolve any particular issue. In the following section, an attempt is made to provide a series of signposts but, as every reader will know, the giving of directions can sometimes end in tears, and there is no substitute for the detailed consideration of the law in later chapters.
1.13 The answer is partly legal and partly practical. The legal hierarchy is: (1) Insolvency Regulation; (2) Model Law; (3) Insolvency Act 1986; and (4) common law, in the sense that:
to the extent that the Model Law conflicts with an obligation of the United Kingdom under the Insolvency Regulation, the requirements of the Insolvency Regulation prevail;[7]
in the case of any conflict between any provision made by or under IA 1986, or by or under that Act as extended or applied by or under any other enactment (excluding the CBIR), and the provisions of the CBIR (which gives effect to the Model Law in Great Britain), the CBIR (and hence the Model Law) prevail;[8] and
as a general principle, effect must be given to English statute where this conflicts with any previously decided case at common law.
1.14 Whilst it is theoretically possible for both the Insolvency Regulation and the Model Law to apply in any given case without conflict, there would in practice usually seem to be little, if any, point in having recourse to the latter because, in general terms, the Insolvency Regulation has a more far-reaching effect than the Model Law. Where the Insolvency Regulation applies, with the exception of the Republic of Ireland, there is no scope for the application of section 426 of IA 1986 to apply because, subject to that exception, the designated countries for the purposes of that section do not include any in the EU.
1.15 Even where the Insolvency Regulation applies, there will be scope for IA 1986 (and rules and regulations made under that Act) and the common law also to apply. As appears from Chapter 2, where jurisdiction is allocated to England under the Insolvency Regulation, there are a number of matters which fall to be decided according to domestic law, and there may be other matters not covered by the Insolvency Regulation which would fall to be decided in accordance with domestic law.
1.16 In the case of a foreign insolvency proceeding in one of the countries or territories designated for the purposes of section 426 of IA 1986,[9] there is scope for the English courts to grant relief under that section and, if applicable, under the Model Law. In many cases, it will not matter which route is followed, but it is worth bearing in mind that section 426 offers potentially wider relief, not least in that it confers jurisdiction on the English court to apply English or foreign insolvency law to the matters specified in the request, whether or not there are equivalent provisions under the law not being applied (see Chapter 4). Whether an English court can apply foreign insolvency law under the Model Law is doubtful (see Chapter 3). It is worth noting that nothing in the Model Law limits the power of the court or a British insolvency office-holder to provide additional assistance to a foreign representative under any other laws of Great Britain.[10]
1.17 Unlike the Insolvency Regulation (which applies in the EU other than Denmark) and section 426 (which only applies to designated countries and territories), the recognition and assistance available under the Model Law is open to all foreign proceedings which satisfy the requirements set out in the Model Law itself.
1.18 Nor must the common law be forgotten. Having been in what has been described as 'a state of arrested development',[11] it has moved on considerably in a number of important recent cases which are considered later in this work.[12] The development of the common law has been a response not merely to the complexities brought about by recent insolvencies on a global scale, but also to the implementation of laws on cross-border insolvency which have international origins and effects. In other words, the common law has had to play 'catch up', a process which is likely to continue. Courts have regularly had resort to the common law in cross-border insolvency cases in areas which are not covered by legislation or where there are gaps in such legislation.
1.19 Inward assistance involves the assistance which the English courts may grant in respect of a foreign insolvency proceeding. Outward assistance refers to the assistance which a foreign court may grant in respect of an English insolvency proceeding.
Unsurprisingly, this work focuses on the former, because the latter will raise questions of foreign law which are outside the scope of this work. Nevertheless, as regards the latter, it is worth pointing out that, where the Insolvency Regulation applies, it applies across the EU (with the exception of Denmark) and should, both in theory and in practice, be applied in a uniform manner in areas where its provisions have effect. Decisions of the ECJ fall to be applied across the EU (except Denmark) and the English courts have been conscious of the European scope of the Insolvency Regulation (as have courts in other EU countries). In Chapter 2 on the Insolvency Regulation, reference is made not only to decisions of the ECJ but also to decisions of courts in other EU countries dealing with issues raised by the Insolvency Regulation. Accordingly, in cases where the Insolvency Regulation has effect, it can in general be assumed that, in cases of outward assistance, the position will be similar in other EU countries to that set out in Chapter 2. This is subject to the important qualification that there are many matters under the Insolvency Regulation which are left to be decided in accordance with domestic law; and, where such law is foreign law, this is not covered by this work.
1.20 Similar considerations apply to the Model Law in respect of outward assistance.[13] As explained more fully in Chapter 3, given the international origins of the Model Law, the aim is that it should be given a uniform application, and an English court will have regard to cases decided by foreign courts in interpreting the Model Law. Accordingly, it can again be generally expected that, in countries which have adopted the Model Law, the position will be similar to that set out in Chapter 3. This is subject to the important qualifications that (a) not all countries will have adopted the Model Law in identical form, in that, as is the case with Great Britain, there may well be modifications to adapt it to domestic law; and (b) there are many matters under the Model Law which are left to be decided in accordance with domestic law; and, again, where such law is foreign law, this is not covered by this work.
1.21 In a cross-border insolvency case, a key question which is likely to arise at the outset is where the centre of main interests ('COMI')[14] of a debtor is situate. The COMI of a debtor is critical to the question of allocation of international jurisdiction to open insolvency proceedings for the purposes of the Insolvency Regulation, which in turn has important effects as to the substantive law to be applied, the recognition of such proceedings across the EU (other than Denmark) and the active assistance and co-operation which other courts in the EU (except Denmark) are mandated to provide to insolvency proceedings taking place in the EU State (save Denmark) where the debtor's COMI is situate.
1.22 If, irrespective of a debtor's domicile or place of incorporation, a debtor's COMI is in England, the full panoply of English insolvency procedures[15] is available (see Chapter 2), provided that the requirements of IA 1986 as developed in the cases are met (see Chapters 5 and 8). In such a case, the proceedings will be recognised across the EU (except Denmark) as main proceedings and, subject to the existence of territorial proceedings, will be given full effect in those States, wherever the assets may be situate.
1.23 If a debtor's COMI is not in England but is elsewhere in the EU (other than Denmark), an English court will not have jurisdiction to open insolvency proceedings unless a debtor has an establishment[16] in England. If the debtor has an establishment in England, the English insolvency proceedings will be limited in its effects to assets situated in England and, if insolvency proceedings have already been opened in an EU State (save Denmark) where the debtor has its COMI, the only insolvency proceedings which may be opened in England are winding up (for companies) or bankruptcy (for individuals).
1.24 A topic which has generated much debate is forum shopping by a debtor, shifting its COMI to enable it to take advantage of the perceived benefits of the insolvency laws of a particular State within the EU (except Denmark). Foreign debtors, individual and corporate, have on a number of occasions shifted their COMI to England for this purpose. Companies have shifted their COMI to England (including companies within a Europe-wide, or even worldwide, group) in order to take advantage of English law on restructuring and rehabilitation, principally through the use of administrations, schemes of arrangement or CVAs or a combination of these procedures. Individuals have shifted their COMI to England in order to declare themselves bankrupt, so as to take advantage of the wider provisions for the discharge of debts, and earlier discharge from bankruptcy, than would be available in the jurisdiction of their previous COMI.[17] There would seem to be little doubt that such COMI shifting is permitted, although the English courts will scrutinise such cases closely in order to be satisfied that the shift in COMI is permanent and real, and not transitory or illusory.
1.25 If a debtor has its COMI outside the EU (except Denmark), an English court may have jurisdiction to open insolvency proceedings. For companies which are not registered under the Companies Acts, the only insolvency proceedings generally available in such a case will be winding up (and schemes of arrangement), provided that requirements laid down in Part V (ss 220–229) of IA 1986 (in the case of winding up) and by the English courts as to sufficiency of connection with the English jurisdiction (in both cases) are satisfied (see Chapter 5). Unless (i) the company is registered under the Companies Acts; or (ii) section 426 of IA 1986 applies (as to which, see Chapter 4),[18] administration and CVAs will not be available. For individuals, bankruptcy and IVAs will be available in such a case, provided that the requirements laid down by Part IX of IA 1986 (and, in particular, ss 264, 265, 267, 268 and 272) and by the English courts are satisfied (see Chapter 8).
However, it is important to note that, whilst any such insolvency proceedings for companies and individuals theoretically have worldwide effect, and all creditors including foreign creditors are entitled to prove, there are likely to be limitations on the effect of these proceedings abroad, particularly where insolvency proceedings are taking place in the jurisdiction where the debtor has its COMI (or is incorporated or domiciled). These limitations are described in Chapter 7 and can also be found in the Model Law.
1.26 The concept of COMI is also important in the context of the Model Law. Insolvency proceedings in the country where the debtor's COMI is situated will, subject to procedural and formal requirements, be recognised as main proceedings under the Model Law, the consequence of which is that certain types of relief (such as a stay on proceedings and execution and suspension of rights to dispose of the debtor's assets) automatically come into effect. Whilst foreign insolvency proceedings in a jurisdiction where the debtor has an establishment will also be recognised under the Model Law, these are regarded as non-main proceedings and, just as in the case of the Insolvency Regulation, will be limited in their effect to assets within that jurisdiction and generally treated as secondary or 'ancillary' to the main proceedings (see Chapter 3).
1.27 In general terms, under the Insolvency Regulation, a judgment of a court opening proceedings in the jurisdiction in which a debtor has its COMI must be recognised in all the other EU States (save Denmark) and with no further formalities produce the same effect in such other EU States as under the State of the opening of proceedings (see Articles 16 and 17 and Chapter 2). Judgments handed down by such a court in the course and closure of the insolvency proceedings, and compositions approved by that court, must also be recognised with no further formalities (see Article 25).[19] This position is qualified where territorial proceedings have been commenced in the Member State in question. Subject to the same qualification, a liquidator (as defined, which includes other office-holders) appointed in the jurisdiction of the debtor's COMI can exercise all the powers conferred on him under the law of the State of the opening of proceedings (and, in particular, to remove and realise assets) in other Member States (save Denmark) (see Article 18 and Chapter 2).
1.28 Under the Model Law, recognition of a foreign insolvency proceeding which is a main proceeding (ie where the debtor's COMI is situate) will automatically bring into effect certain types of relief (such as a stay on proceedings and execution and suspension of rights to dispose of the debtor's assets) (see Article 20 and Chapter 3). Discretionary relief can also be granted in aid of foreign main or non-main proceedings, including a similar stay or suspension, the examination of witnesses, obtaining evidence or information concerning the debtor, entrusting the administration or realisation of the debtor's assets in Great Britain to the foreign representative and 'granting any additional relief which may be available to a British insolvency officeholder under the law of Great Britain' (Article 21). The latter provision allows the English court to grant to the foreign office-holder the same wide range of relief as would be available in an English insolvency proceeding (even though not in fact instituted), even where such relief would not be available under the system of law under which the foreign office-holder was appointed. Similarly, by Article 23 upon recognition and subject to certain requirements and protections, a foreign representative is given standing to make an application to the English court under the provisions in IA 1986 for adjustment of prior transactions (including transactions at an undervalue, preferences, avoidance of floating charges, transactions defrauding creditors), whether or not English insolvency proceedings have been instituted against the debtor.
1.29 Where a request for assistance is made by a foreign court to the English court under section 426 of IA 1986, an English court may apply English insolvency law or the insolvency law of the country or territory making the request for assistance to the matters specified in the request. Thus, if English insolvency law were to be applied, the full range of relief which might have been given to an English insolvency office-holder, had one been appointed, is potentially available in such a case (including relief under the provisions of IA 1986 for adjustment of prior transactions referred to above and, in addition, relief under other provisions of the Act such as the wrongful and fraudulent trading provisions). If the foreign insolvency law were to be applied, relief under the insolvency law of the country or territory making the request would be available (see Chapter 4).
1.30 The extent of assistance which an English court might provide at common law has generated heated debate. The decision of the Privy Council in Cambridge Gas[20] would tend to suggest that, in a case in which section 426 has no application, and therefore an English court could not at common law assist by applying the provisions of the foreign insolvency law which formed no part of the domestic system, the English court should nevertheless be able to provide assistance at common law by doing whatever it could have done in the case of a domestic insolvency, and make available to a foreign office-holder the remedies which would have been available if equivalent proceedings had taken place in the domestic forum. Emphasis was given to the principle of universality and the desirability of avoiding multiple insolvency proceedings. But, in Re HIH Casualty and General Insurance Ltd ('HIH'),[21] the House of Lords was split '2.5 v 2.5' on the extent to which the English courts could provide assistance at common law, with the senior Law Lord sitting on the fence. At the heart of the split was the question of whether an English court could disapply substantive provisions of the English statutory insolvency scheme in giving assistance to foreign insolvency proceedings. In view of the extensive consideration of these cases later in this volume, there is no need to elaborate further at this stage.
1.31 In a case which is subject to the Insolvency Regulation, there are detailed provisions there set out for which system of law is to govern any particular issue. In general terms, the law of the Member State in which insolvency proceedings are opened governs the opening, conduct and closure of such proceedings and their effect (Article 4),[22] subject to exceptions in the case of particularly significant legal rights and relationships such as proprietary rights (including security), set-off, retention of title, contracts and registrable rights relating to immovable property, the effect of insolvency proceedings on contracts of employment, patents and trademarks, avoidance provisions and pending lawsuits (see Articles 5 to 15 and Chapter 2). However, even where the law of a particular Member State is specified, that may bring into play the private international law rules of that Member State. Thus, for example, the law of the State of the opening of proceedings will determine the lodging and admission of claims: if that law were English law and the claim in question were governed by a foreign system of law, the English court under its rules of private international law would apply that foreign law in order to establish whether the claim was valid and should be admitted to proof.
1.32 The Model Law does not contain the same detailed provisions as to choice of law which are to be found in the Insolvency Regulation. Unlike the Insolvency Regulation, the Model Law is not generally concerned with issues of allocation of jurisdiction and choice of law provisions, the focus being on the grant of access of foreign representatives and courts to the courts in England, the recognition of a foreign proceeding and the relief which an English court might grant (summarised in the previous section of this chapter).
1.33 As already mentioned, where a request for assistance is made by a foreign court to the English court under section 426 of IA 1986, an English court may apply English insolvency law or the insolvency law of the country or territory making the request for assistance.
1.34 In the case of insolvency proceedings which are not the subject of the Insolvency Regulation, and subject to the foregoing, the English court will apply its rules of private international law to decide which system of law governs a particular issue. Examples which appear later in this work include the question of whether the English courts will give effect to the discharge of debts by a foreign insolvency proceeding (see Chapter 13) and questions of priority and set-off (see Chapter 15).
[1] (1764) 1 Hy BI 131n, Wallis 59n.
[2] (1747) 3 Swan 380n.
[3] The precursors of section 122 (starting with Bankruptcy Act 1861, s 220) were more limited in effect (see Chapter 4).
[4] 'Insolvency Law and Practice', Cmnd 8558 (June 1982).
[5] Council Regulation (EC) 1346/2000.
[6] SI 2006/1030, enacted under the authority of Insolvency Act 2000, s 14.
[7] Model Law, Article 3.
[8] CBIR, reg 3(2).
[9] Anguilla, Australia, the Bahamas, Bermuda, Botswana, Canada, Cayman Islands, the Falkland Islands, Gibraltar, Hong Kong, Republic of Ireland, Montserrat, New Zealand, St Helena, Turks and Caicos Islands, Tuvalu, the Virgin Islands, the Bailiwick of Guernsey, Malaysia, the Republic of South Africa and Brunei Darussalam.
[10] Model Law, Article 7.
[11] Professor Fletcher, Insolvency in Private International Law (1st edn) at p 93, cited in Cambridge Gas Transportation Corpn v Official Committee of Unsecured Creditors of Navigator Holdings plc [2006] UKPC 26, [2007] 1 AC 508, at para 18.
[12] In particular, Cambridge Gas, above; Re HIH Casualty and General Insurance Ltd [2008] UKHL 21, [2008] 1 WLR 852 ('HIH'); Rubin and anor v Eurofinance SA and ors [2010] EWCA Civ 895, [2011] Ch 133 (CA). The decision in Rubin is under appeal to the Supreme Court.
[13] The Model Law has been adopted by Australia (2008), Canada (2009), Columbia (2006), Eritrea (1998), Greece (2010), Japan (2000), Mauritius (2009), Mexico (2000), Montenegro (2002), New Zealand (2006), Poland (2003), Republic of Korea (2006), Romania (2003), Serbia (2004), Slovenia (2007), South Africa (2000), United Kingdom (2006) and the United States of America (2005). See www.uncitral.org/uncitral/en/uncitral_texts/insolvency/1997Model_status.html (which also makes reference to the British Virgin Islands where provision has been made for enacting a form of the Model Law, but this has not yet been brought into force).
[15] Other than receivership where COMI is not relevant to jurisdiction.
[17] For example, there has been a stream of German professionals (doctors, dentists etc) queuing at the doors of the Bankruptcy Registrars in London to make themselves bankrupt. See further Chapter 8.
[18] If a request is made in accordance with IA 1986, s 426 by a foreign court, s 426 confers jurisdiction on the English court to apply English insolvency law, including the making of an administration order in relation to a company which, absent the request, the English court would have had no jurisdiction to do.
[19] As to the enforcement of judgments and orders made in foreign insolvency proceedings generally, see Chapter 12.
[20] [2006] UKPC 26, [2007] 1 AC 508, para 22.
[21] [2008] UKHL 21, [2008] 1 WLR 852.
[22] In the case of territorial proceedings generally, only as regards assets within that Member State.