UNCITRAL Model Law on Cross-Border Insolvency
- Type: Model Law
- Date of signature: 30/05/1997
- Place of signature: New York, USA
- Depositary: United Nations Commission on International Trade Law (UNCITRAL)
- Date of entry into force: N/A
What is it about?
The purpose of this Law is to provide effective mechanisms for dealing with cases of cross-border insolvency. As stated in the preamble, it is hoped that such mechanisms will inspire : (a) Cooperation between the courts and other competent authorities of this State and foreign States involved in cases of cross-border insolvency; (b) Greater legal certainty for trade and investment; (c) Fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested persons, including the debtor; (d) Protection and maximization of the value of the debtor's assets; and (e) Facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment.
Why is it relevant?
Foreign investors benefit from rights and protections before national tribunals. They thus benefit from and can count upon some legal certainty and predictability which serves to encourage investment.
This Law is not a Convention, but rather a Model which serves as a guide for national legislations. Six States have adopted legislation based upon the Model Law. As of 2004 these are South Africa, Eritea, Japan, Mexico, Serbia and Montenegro. There is also a guide for the incorporation of the Model law to assist States in drafting their relevant legislation.
- European Convention on Certain International Aspects of Bankruptcy (Council of Europe, 5 June 1990)
- UNICTRAL Model Law on Cross-Border Insolvency (UNCITRAL., May 1997).