The New Model Law—goodbye to Gibbs?

The New Model Law—goodbye to Gibbs?  

Sarah Clarke at Hardwicke Chambers looks at the new UNCITRAL Model Law on the Recognition and Enforcement of Insolvency Related Judgments and its potential impact on Re Gibbs and Ruben v Eurofinance, if it was adopted by the UK.

Introduction

The UNCITRAL Model Law on the Recognition and Enforcement of Insolvency Related Judgments (the New Model Law) is intended to fill the gaps that currently exist in cross border conventions as they apply to the recognition and enforcement of judgments in insolvency proceedings.

  • As noted by the UNCITRAL working group, very few states have recognition and enforcement regimes which address insolvency related judgments, and none have a regime which covers all the orders that might be made in insolvency proceedings (see Working Group Report, para 16)  
  • The Hague Conference Convention on Choice of Court Agreements 2005 does not apply to ‘insolvency, composition and analogous matters’ (see Article 2 (2) (e) of Hague Conference Convention on Choice of Court Agreements)  
  • The Model Law on Cross-Border Insolvency (the Model Law on Insolvency), which was enacted in the UK as the Cross Border Insolvency Regulations 2006 (CBIR) deals with:
    • Access—namely the right of foreign creditors to participate in insolvency proceedings within the UK  
    • Recognition—of foreign insolvency proceedings and associated relief  
    • Co-operation—between courts; and  
    • The co-ordination of concurrent proceedings in different states

In the UK, following the decision in Ruben v Eurofinance SA [2012] UKSC 46, the Model Law on Insolvency is regarded as dealing with procedural matters, and does not extend to the recognition and enforcement of foreign judgments. It now is clear from the Guide to Enactment which accompanies the New Model Law, that UNCITRAL did not intend the Model Law on Insolvency to be so limited. In Article X to the New Model Law, UNCITRAL propose an additional provision to clarify that the relief available under Article 21 of the Model Law on Insolvency does include the recognition and enforcement of a judgment in order to reverse the effect of Ruben and judgments with similar

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.