PREFACE TO THE FOURTH EDITION

Transcription

1 PREFACE TO THE FOURTH EDITION It is a great pleasure to notice that the third edition of International Insolvency Law, published early 2012, has been received so well by practitioners, judges as well as scholars. I thank the reviewers for their positive remarks and constructive criticism. It is especially rewarding that the book is used in so many countries. The reviews I have seen are from Belgium (Arie van Hoe, Tijdschrift voor Belgisch Handelsrecht 2013/8, 823), Estonia (Paul Varul and Signe Viimsalu, Juridica International XIX/2012, 187/188), France (François Mélin, Journal du droit international 2012, 1116/1117), Germany (Jessica Schmidt, in: 14 German Law Journal 2013/07, ; Heinz Vallender, Zeitschrift für Wirtschaftrecht ZIP 2/2013, 96), Italy (Giorgio Corno, Nuovo Diritto delle Società 2013), Lithuania (Rymvidas Norkus, Justitia 2012/77, 120/121), Poland (Michał Barlowski, Kwartalnik Nauk O Przedsiębiorstwie 2013/2, ), UK (Paul Omar, eurofenix Summer 2012, 13) and USA (Samuel Bufford, International Insolvency Law Review 2/2013). Given the growing volume of relevant materials, the increase of forms of (self-)regulation, but also the different developments in insolvency both in the world and in the EU, together with my publisher I have decided to split the contents of this volume in two parts: International Insolvency Law: Part I Global Perspectives on Cross-Border Insolvency Law, andinternational Insolvency Law: Part II European Insolvency Law. In this publication (the 4 th edition to be published late 2015) the state of play in international ( non-eu ) insolvency law is treated and discussed. In the EU, more specifically, the recast of the Insolvency Regulation will come into legal effect 26 June 2017 (see blog at doc5). I hope to be able to present a fully reworked book on European Insolvency Law in Because reviewers specifically recognized as a major strength of the third edition of International Insolvency Law its bibliography (e.g. Bufford and Omar), I have chosen to maintain the bibliography (unsplit). It is intended that Part II will include a consolidated Index, which allows users to look for a word or a term at the pages of the respective page of Part I or Part II at which they can be found. In this 4 th edition I have maintained the way of treating the subject. I refer to the preface to the third edition. I thank Gert-Jan Boon, researcher at the Leiden Law School, for his valuabe support with updating Chapter I 8 (soft law sources). In V

2 Preface to the fourth edition the light of the growing volume of cases and literature concerning the UNCITRAL Model Law I had, compared to the 2012 edition, to be more selective in commenting on cases in the UK and the USA, applying their version of the Model Law. The law is stated on the basis of information available to me at August 1, Readers are invited to send me comments, cases or literature at the following address: info@bobwessels.nl Dordrecht The Netherlands September 2015 Bob Wessels VI

3 PREFACE TO THE THIRD EDITION This publication, Wessels, International Insolvency Law, is a revised and augmented edition of International Insolvency Law published in As with the 2 nd edition in 2006, this third edition appears as Volume X of the 10 volume series Wessels Insolventierecht (Insolvency Law). The series, published in the Netherlands as of 1999 now comprises the following books: Vol. I. Faillietverklaring (Adjudication of Bankruptcy) Vol. II. Gevolgen van faillietverklaring (1) (Consequences of Insolvency, Part I) Vol. III. Gevolgen van faillietverklaring (2) (Consequences of Insolvency, Part II) Vol. IV. Bestuur en beheer na faillietverklaring (Governance of the Estate) Vol. V. Verificatie van schuldvorderingen (Allowances of Claims) Vol. VI. Het akkoord (Composition, Private Arrangements) Vol. VII. Vereffening van de boedel (Winding-up the Estate) Vol. VIII. Surseance van betaling (Legal moratorium) Vol. IX. Schuldsaneringsregeling natuurlijke personen (Debt Rescheduling Natural Persons) Vol. X. Internationaal insolventierecht (International Insolvency Law) The second edition of the full series was published between 2006 and With the publication since 2010 of the third editions of Volumes III - VIII and the third edition of Volume X on international insolvency law I am confident deo volente that I will be able to complete the third edition of the complete series in The aim of the complete series is to serve as a handbook for insolvency practitioners in the Netherlands, such practitioners may include receivers and administrators, judges, creditors representatives and banks. The manner in which the materials in Volume X on International Insolvency Law are treated differs from that in the other books in the series. I invite readers to read the (translated) preface to the 2003 edition, printed below. This book differs from the other Volumes in its aim not only to be a first port of call on any question on VII

4 Preface to the third edition international insolvency law for specialists (such as practitioners, judges and scholars), but also for those who are new to the subject, including legislators and students. In addition to the effort to integrate the huge and vast increasing body of case law, scholarly literature and other available sources into this third edition, in this preface mention is made of the most remarkable changes compared to second edition of After a refreshed Bibliography, most of its sources being included in the discussions and analysis thoughout the book, the first chapter continues the debate on principles and new dogmatic and pragmatic approaches to issues and disputes on international insolvency law, including several remarkable court decisions. In this chapter additional information could be provided in areas such as Asia (China), Africa and Latin America. The second part of Chapter I intends to present a complete and accurate portrait of the ongoing efforts of international institutions and organizations, mainly in the private sector, in the area of insolvency reform and standard setting principles in international insolvency law, such as the use of Protocols or cross-border insolvency agreements. Chapter II covers the area of international insolvency law in the Netherlands. Since 2006 legislative proposals have been made in the Netherlands to include a coherent set of international insolvency law provisions, including cross-border cooperation between insolvency office holders and courts, as part of an overall overhaul of the Netherlands Bankruptcy Act of Early 2011, however, the Dutch government has decided not to push this matter forward into a legislative proposal, for which reason the recommended set has been withdrawn from parliamentary discussion. Therefore in the Netherlands general rules of private international law, developed in court cases, remain to be the guidance in this field. These court cases for the last five years have been dominated greatly by legal disputes related to the insolvent Russian corporate giant Yukos Oil Company having shares in a company, incorporated in the Netherlands, which holds large assets in several countries. From over thirty (published) court cases on a range of matters only those which closely relate to the core matters of international insolvency law are covered in this Chapter. The good news is that the Dutch notorious approach to giving effect to foreign insolvency proceedings (outside the scope of the EU Insolvency Regulation), the so-called principle of territoriality, has a much more limited meaning that generally has been understood. In Chapter III in this edition the main topic is the UNCITRAL Model Law and the consideration to weigh when a State is in the proces of enacting it. I also describe and comment upon the UNCITRAL Legislative Guide (2004), specifically its 2010 addition, Part Three of the Legislative Guide, UNCITRAL s recommendation regarding enterprise groups, and the Practice Guide of The text of the former edition of this book was finalised close to a turning point in the Model Law s development, October 2005, with the adoption of Chapter 15 in the U.S. Bankruptcy Code, and April 2006, with the enactment in Great Britain (i.e. England, Wales and Scotland) of the Cross Border Insolvency Regulations 2006 VIII

5 Preface to the third edition (S.I. 2006/1030). In Chapter III therefore, the analyses of the Model Law could be broadened and deepened with a short analysis of some fifty USA and UK cases and a selection of the ever growing literature, mainly from sources in the USA and the UK. Here, as well as in other parts of the book, when I am commenting on legal matters and published court cases my writing does not constitute definitive advice and should not be used as the basis for giving definitive advice without checking the primary sources. Chapter IV is an extensive treatment of the EU Insolvency Regulation. In this chapter I have taken account of the enormous volume of literature (mainly from the Netherlands, Austria, Belgium, England, France and Germany). The other important source are court cases. Since the last edition some 350 cases have been included on many of the (detailed) questions that come up in practice. Special attention in this chapter has been given to the main themes in recents debates, such as the definition of collective insolvency proceedings, the meaning of the term centre of main interest (COMI), including the treatment of group insolvencies, the system of conflict of law rules in the EU Insolvency Regulation, the rather complicated system of recognition and enforcement of other (insolvency related) judgments and practical tools and recommendations for communication and cooperation in cross-border insolvency cases. The law is stated on the basis of information available to me at September 1, Readers are invited to send me comments, cases or literature at the following address [ ]. Dordrecht/Leiden The Netherlands September 2011 Bob Wessels IX

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7 PREFACE SECOND EDITION (2006) (..) In 2004 the publisher invited me to consider a second edition of the complete series. After giving some thought to the idea of embarking on a journey of some five or six years, I decided to accept the invitation, particularly when encouraged by the publisher to deliver Volume X in English. For the current edition of International Insolvency Law I have also been able to undergo discussions with the authors who reviewed the 2003 Dutch book, Mariëlle E. Koppenol-Laforce, in WPNR (2004) 6590, and the joint review of professors Frank Verstijlen (University Groningen) and Reinout Vriesendorp (University Tilburg), in WPNR (2004) , towards whom I am grateful for their comments. I decided to translate and supplement the Dutch book on international insolvency law for four main reasons. The first being that I was encouraged to do so by several international colleagues. Their interest in European continental developments matched my own wish to continue and broaden discussion and international debate with some twenty authors of books and larger publications published since the release of the first edition of this work. I refer here to literature written in English, French, German and Dutch by authors from Australia, Austria, Belgium, Canada, Croatia, England, France, Germany, Greece, Hong Kong, Italy, South Africa, Spain, Sweden, Switzerland, the United States of America and the Netherlands. It is evident that I have focused my attention on a selection of topics and views. In some cases the limitations of this publication obliged me to limit my remarks or to refer to literature for further research, though I hope to have been able to clarify or exemplify some of my earlier views or to further elaborate on topics that had been left somewhat sketchy in the 2003-edition. In addition, with regard to the EU Insolvency Regulation (particularly in Chapter IV) I have been able to mention and analyze around 140 published court cases in which the Regulation has been applied. The second reason is that, since 2000, several of my students (following postgraduate courses in Amsterdam, Frankfurt (2004) and Pretoria (2005)) have expressed the usefulness of the materials and the accompanying comments on the domain of international insolvency law. Since the beginning of the 1990 s the developments in this area have achieved breath-taking speed. These materials and comments occur throughout the book. XI

8 Preface second edition (2006) The third reason is more practical. When practitioners, judges, academics and students are involved in cross-border insolvency cases the language may be German (e.g. in a cross-border case involving Germany and Austria) or Dutch (in cases involving the Netherlands and the Northern part of Belgium), but for the vast majority of the time, at least in continental Europe, the language used will be English. For Dutch practitioners a book written in English which takes into account Dutch domestic legislation and Dutch private international law concerning cross-border insolvencies can be regarded as a useful support in cross-border insolvency practice. At this juncture it should be noted that in large sections of this book the English used is the equivalent of the English wording used in the UNCITRAL Model Law or the EU Insolvency Regulation of It is a known fact that the some of the English wording and sentences used in the EU Insolvency Regulation can be confusing even for those whose mother tongue is English. The fourth and final reason is to disclose the Dutch approach to international insolvency issues and the realization of the EU Insolvency Regulation in the Netherlands. Dutch companies participate widely in international trade and investment and foreign merchants and companies trade with Dutch companies and invest in the Netherlands. A thorough understanding of the topics may help guide foreign companies, practitioners and judges to a better understanding of the domain of Dutch international insolvency. Some major changes have been made to the first edition of the book, these are as follows. In Chapter I the case law on 304 of the United States Bankruptcy Code has been updated, however it should be noted that as of 17 October 2005, Chapter 15 replaced 304. Despite this, it is commonly understood that the major results of case law under 304 will be reflected in the interpretation of Chapter 15 provisions. Obviously, Chapter 15 has been taken into account in Chapter III which deals with the UNCITRAL Model Law. Furthermore, in Chapter I some of the regional conventions (in Latin-America, the Nordic European countries, the OHADA Treaty in Central Africa) have been explained more extensively. In addition, several of the soft law sources have been expanded and explained, e.g. the so-called Principles of European Insolvency Law 2003, the 2004 Core Principles for an Insolvency Law Regime of the European Bank for Reconstruction and Development (EBRD) and UNCITRAL s Legislative Guide on Insolvency Law of Again, it should be noted that this book deals with international insolvency law some of the sources, though not national in origin, provide relevant materials in their aim to improve and harmonize national insolvency law applicable to domestic cases. In Chapter II the status of international insolvency law in the Netherlands has been updated. Despite the EU Insolvency Regulation being applicable to intracommunity cases since May 2002, Articles of the Dutch Bankruptcy Act ( Faillissementswet or Fw ) remain relevant for cross-border cases with XII

9 Preface second edition (2006) third-(non-eu)countries as will the general application by courts in the Netherlands of private international law. Chapter III of the 2003 edition was limited to a description and analysis of the UNCITRAL Model Law on Cross-Border Insolvency of 1997, including illustrations of the provisions in (the then draft) Chapter 15 US Bankruptcy Code. In the revised Chapter III, legal commentary, mainly from sources in the USA (where many authors were inspired by the Model Law becoming a reality) has been included and discussed. Also in Chapter III some comments have been included concerning the draft of the Cross-Border Insolvency Regulations 2006, as presented in Great Britain in August 2005 as a draft Statutory Instrument. An additional section has been added in which I describe and briefly discuss recommendations on topics of international insolvency law as found in UNCITRAL s Legislative Guide on Insolvency Law of Chapter IV is an expanded version of my 2003 commentary on the EU Insolvency Regulation of May The Insolvency Regulation s application has been extended as a consequence of the EU enlargement (by ten Member States) on 1st May The Act of Accession (OJ L 236 of 23 September 2003) led to some minor changes in the text of the Insolvency Regulation and the lists of insolvency proceedings, winding-up proceedings and liquidators in the respective Annexes to the Insolvency Regulation. In April 2005 Annexes A, B and C to the Insolvency Regulation were amended (OJ L of 20 April 2005). The booming literature, originating from some ten jurisdictions, as well as some 150 court cases have been considered in this chapter. Again it should be noted that the abundance of relevant literature made it necessary to be highly selective, even when such selection was already limited by those languages I am able to understand (English, German, French and Dutch). Several court cases have been studied only in the form presented on private databases (such as i.e. as summaries of the original source. Finally, Chapter V, is new. Some brief remarks are made as conclusions to the preceding chapters and identifying elements which may be relevant for future developments within international insolvency law. The following is provided as guidance for readers of the texts in this book. As the title of the book expresses I have used the term insolvency to indicate the bankruptcy of a certain debtor. In a large part of the English-speaking world the word bankruptcy is used to refer to the bankruptcy of individuals (or natural persons ). In the USA bankruptcy is the general term for corporate bankruptcy. In the Netherlands, the 1896 Act which is still in force, is known as the Bankruptcy Act. The Netherlands Royal Committee, entrusted with the proposals for renewal of said Act, of which Committee I am a member, is formally known as Commissie Insolventierecht. Even in the absence of a translation it is clear that the scope of XIII

10 Preface second edition (2006) the Committee s work, which includes debt reorganization proceedings towards natural persons is symbolized by its name. Debt reorganization proceedings were included in the Dutch Act in 1998, without the name of the Act being amended. References to court decisions have not to the authentic name of the court, but to terms as court or its equivalent district court for insolvency matters decided in first instance, to court of appeal when an appeal is decided on and to Supreme court to indicate the court of the highest instance in a country, which decises in insolvency matters. For certain words in legal provisions or legal commentary the English translation of a Dutch, German or French word is given, with the authentic word(s) between brackets (in italics). The translations into English are not official translations. In most cases they are my translations. I have translated and augmented the 2003 edition of the book myself. Although the full responsibility is mine, the English in this publication has been edited by Laura Quick (Amsterdam) to whom I am greatly indebted. I concluded my research in December I am highly indebted to Professor Ray Warner of St. John s University School of Law in New York for his invitation to carry out research at the Law School as Visiting Scholar , and to Barbara Traub, Head of Reference Services of the Rittenberg Law Library for the introduction to a wealth of sources concerning (international) bankruptcy law. Only in exceptional circumstances sources from after this date have been mentioned. The text of the manuscript and its tables, indexes and Annexes were finalized during February Dordrecht, February 2006 Bob Wessels XIV

11 PREFACE FIRST EDITION (2003).. many commentators fear that the coming years will bring a wave of international insolvencies.. and that this will be the new frontier in corporate bankruptcy law. (David A. Skeel, Jr., Debt s Dominion. A History of Bankruptcy Law in America, 2001, p. 235). International Insolvency Law is the designation commonly used to indicate issues relating to insolvency proceedings with cross-border aspects. International insolvency law (or international bankruptcy law) is commonly described in international literature as a body of rules concerning certain insolvency proceedings or measures, which cannot be fully enforced, because the applicable law cannot be executed immediately and exclusively in connection with an international aspect of a given case. The Netherlands does not possess such a body of rules. The Netherlands Bankruptcy Act of 1896 provides some accessory provisions, limited elements of which are applicable to international insolvency cases. Cross-border insolvency issues with neighbouring countries are subject to a 1925 Convention with Belgium and a 1962 Convention with Germany. Naturally the EU Insolvency Regulation is applicable to insolvency proceedings opened after 31 May The Insolvency Regulation has replaced the aforementioned Conventions for the matters referred to therein. The Conventions are not examined individually in this book. In several respects the approach chosen for this book differs from the one followed for the other volumes in the series. Dutch legal literature lacks a review of international insolvency law, (which is obviously not limited to Dutch sources), therefore, my aim in Chapter I is to fill that gap. Chapter I is mainly descriptive in nature, elucidating on the key questions in the research domain and the solutions that may be found in various conventions and the legislation of some key countries. It is generally held that a Treaty on international insolvency having world wide reach is an impossible goal to achieve, therefore over the last ten to fifteen years institutions and organizations such as INSOL International, IMF, World Bank and UNCITRAL have taken several initiatives to codify best practices etc. These initiatives are described and, for readers who wish to explore the subject further, sources of interest are provided. Although some well-known XV

12 Preface first edition (2003) court cases from abroad are discussed, I chose not to mention the specific sources in which the full cases can be found. In the Netherlands one rarely finds such sources. In most cases I refer to literature, within which primary sources are mentioned. The first chapter is intended to be an accurate portrayal of the ongoing efforts of major international institutions and organizations, both public or private, in the area of international insolvency law. The current status of international insolvency law in the Netherlands is developed mainly in court cases and the application of the limited rules laid down in Articles of the Dutch Bankruptcy Act ( Faillissementswet, or: Fw). It should be noted that since the entry into force of the EU Insolvency Regulation in May 2002, these cases have lost almost all importance within the EU community (except in Denmark). Nevertheless, the contents of this Chapter continue to be significant with respect to questions of private international law in relation to third (non-eu) countries. In Chapter III the UNCITRAL Model Law on Cross-Border Insolvency from 1997 is described and analyzed. The Model Law has been utilized in some ten countries as the inspiration or starting point for the development of a nation s legislative system of international insolvency law. The Model Law is a major development to which, in my opinion, appropriate attention should be paid by the Netherlands, both with an eye to the renewal of the Dutch insolvency legislation, and because, in practice, insolvency practitioners are likely to encounter the consequences of other countries legislation which has been amended, based on, or inspired by, the Model Law. The text of the Model Law is only available in the official languages of the United Nation (thus not in Dutch), therefore I have used the English language version. I have written the Chapter in English in order to prevent certain terms (e.g. stay or relief ) from losing their original meaning through a translation that insufficiently captures the intention of certain provisions. This Chapter is also descriptive by nature. In writing it I have drawn from the Guide to Enactment of In order to illustrate a method by which conversion of the Model Law into national legislation may occur I added examples of the fresh draft of Chapter 15 of the US Bankruptcy Code, even though this text for reasons not related to its content has not yet been approved by the American Senate. A detailed commentary on the EU Insolvency Regulation (InsReg) follows in Chapter IV. Its content closely resembles a Convention which was ratified by almost all EU countries in 1995, but did not actually enter into force. Given the substantial similarity between the Convention and the Regulation I have not disclosed every instance in which a remark was made in legal commentary with reference to the Convention and not to the Regulation. As the occasion arises, e.g. in citations, the reference made by an author to the Convention has been replaced with: [Regulation]. Where Articles are referred to in Chapter IV the reference is to those Articles in the Regulation. Articles in the Dutch Bankruptcy Act are XVI

13 Preface first edition (2003) referred to with the addition Fw. In preparing the text for this chapter I used commentary written by Gabriel Moss and Tom Smith, Commentary on Council Regulation 1346/2000 on Insolvency Proceedings, in: Moss, Gabriel, Ian F. Fletcher, Stuart Isaacs (eds.), The EC Regulation on Insolvency Proceedings A Commentary and Annotated Guide, Oxford University Press (2002), to which commentary I rendered my assistance. References are made to the draft of the text in this book, which was not yet been published at the time the manuscript was concluded. The nature of international insolvency law leads to a further difference in comparison with the other Volumes in the series. In considering opinions in legal literature I refer quite extensively to sources written in English and German. These sources have been mentioned briefly with a reference to the Bibliography published at the beginning of the book. I refer to the beginning of this Bibliography which describes the way in which references have been made. As according to Dutch practice, where references are made to authors, only their surnames are given (and not their christian names or middle initials which are commonly not published by the author him/herself). Literature, court cases, legislation and regulations available up until November 1st 2002 have been included, as is a list of relevant websites. I particularly encourage the consultation of websites when reading Chapter I. All websites were checked during the proof-reading period (December 2002). Amsterdam/Dordrecht, November 2002 Bob Wessels XVII

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