Courts all over the world are increasingly involved in cross-border insolvency cases. More recently in cases regarding swindlers such as Allen Stanford and Bernhard Madoff there are insolvency proceedings pending in 4 respectively 8 countries. 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 prof. Ian F. Fletcher, University College London, and myself, over a period of some six years, with assistance from a group of some 100 academics, practitioners, judges and regulators from around 30 jurisdictions all over the world. Recently the final report was presented to ALI and the membership of III unanimously approved the report at its 12th Annual conference (Court de Cassation, Paris, 20-21 June 2012).
These 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 cover all jurisdictions in the world. The Report contains over 280 pages, with around 130,000 words (text including footnotes) including:
- 37 Global Principles for Cooperation of International Insolvency Cases, these include principles on 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 to improve the components to smoothen cross-border communication and coordination; and
- as 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. They can be found at my website, weblog: 2012-06-doc1.
During a recent meeting, where judges were present, it was announced that several countries will review the Global Principles to see to what extent they are applicable in cases where courts of these countries are involved. Australia, Canada and Germany are among these countries. There are also indications that the Global Principles will be used by the European Commission during its evaluation process, this year, of the EU Insolvency Regulation. III will post the final report of the Global Principles on its website and establish a link to facilitate an open discussion forum.
These steps will promote and ensure that courts and practitioners can be guided in their search for suitable solutions in larger cross-border insolvency matters, allowing the Global Principles for Cooperation in International Insolvency Cases to achieve their objectives.