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Modified universalism for cross-border insolvencies : does it work in practice?

University of British Columbia

This thesis is a study of the application by courts of Canadian and British versions of the UNCITRAL Model Law on Cross-Border Insolvency. The Model Law proposes a legal framework that has as its theoretical foundation the modified universalism theory. By trying to determine whether the application of the Model Law provisions on core concepts of this Law promotes such goals as efficiency, fairness, predictability and protection for local interests in cross-border insolvency cases, this study ultimately assesses whether modified universalism works in practice. Modified universalism is a relatively new theory for the resolution of cross-border insolvencies that gained international and national acceptance two decades ago. It recognizes that a cross-border case should be administered under a single controlling insolvency proceeding governed by the laws of the country commencing that proceeding. However, the theory allows countries other than the country where the insolvency proceeding was commenced, before giving deference to the controlling proceeding, to determine whether such an act of cooperation would infringe on local interests. On the one hand, the centralization of the administration of a cross-border insolvency case is thought to bring efficiency, fairness and predictability to this process. On the other hand, because of the diversity of national insolvency laws, a centralization of the administration of such cases may infringe on local interests, such as the interest to protect the legitimate expectations of creditors or to further fundamental local public policies. The success of the Model Law, and ultimately of the modified universalism theory, depends on how courts strike a balance between these goals when considering requests for recognition of foreign insolvency proceedings and for relief in favor of these proceedings. The study concludes that the Canadian and British courts’ decisions strengthen rather than weaken the claim that the Model Law works in practice. Such a conclusion in turn suggests that modified universalism can serve as the theoretical foundation of a workable legal framework for the resolution of cross-border insolvencies. This finding may be important for countries that consider revising their cross-border insolvency laws in an effort to facilitate the administration of cross-border insolvency cases.

Text

2014-10-23

Attribution-NonCommercial-NoDerivs 2.5 Canada

http://hdl.handle.net/2429/50864

Law

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/2.5/ca/