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Study On Issues Relating To The Law Of Conflicts In Cross-border Insolvency

Posted on:2007-03-04Degree:DoctorType:Dissertation
Country:ChinaCandidate:X Q WangFull Text:PDF
GTID:1116360185954369Subject:International law
Abstract/Summary:PDF Full Text Request
Along with the rapid development of global economic integration, there are increased cross-border bankruptcy cases. In view of the fact that there are closed relationship between the various countries' bankruptcy legislation and the different political goals and as well as the legal cultural context of those countires, and that much difference exist among those various countries with respect to the cross-border bankruptcy cases, there are much difficulties to the international reconciliation toward the cross-border bankruptcy cases.With the Chinese economy integrated into the tide of world economy, china may be faced with much more cross-border bankruptcy cases to be dealt with. But the Chinese exsiting legislation needs to be pefected with regards to the cross-border bankruptcy cases which brings about confusion to the judicial practice. It is of great importance to strenghthen the study on legal matters related to cross-border bankruptcy cases.This paper, from the angle of law of the conflicts of laws, elaborates the matters which need to be studied when dealing with the cross-border bankruptcy cases in judicial practice, and many domestic and foreign cases are cited in order to analyze related theories. Since the there are no uniform operative international convention on cross-border bankruptcy cases at present, and dramatic difference exist among various domestic legislation, and that the international reconciliation on laws with respect to cross-border bankruptcy is indispensable, so this paper put much emphasis on harmonization of laws of cross-border bankruptcy. Finanly, this paper, conbined with the latest development of the cross-border bankruptcy in the world, puts forward issues in legislation and judicial practice about cross-border bankruptcy in china, and gives my own opinion about those matters.Besides the introduction and the postscript, this paper is divided into six chapters, approximately 190,000 characters.Chapter One is introduction. This chapter expatiates on basic issues in cross-border insolvency, involving three issues: The first is the meaning of cross-border insolvency, history and legal characters thereof. The second is the complexity of the law conflict in cross-border insolvency and the reason thereof. As the author, I deem that the reasons of the law conflict are: 1. lack of uniform international rules and cooperation between countries; 2. remarkable differences existing in the laws of different countries; and 3. special protection given to domestic creditors. The insolvency system is a closing system on the allocation of the loss. It allocates insolvency interests according to the predefined classification system, which means that the reimbursement acquired by one party is reduction in the income of another. Although in recent years much effort has been paid in the international cooperation, the parochial thought that the domestic interests shall prevail in the field of cross-border insolvency has not been changed. The third issue is the developing state of cross-border insolvency and the basic starting point dealing with cross-border insolvency under the tendency of economic globalization. In the process dealing with cross-border insolvency cases, insufficiency in the rules dealing with such cases shows at large in the legal systems of different countries, which accelerates the paces in legislation and improvement of cross-border insolvency in countries. Feasible legal frame may be offered for the effective cooperation in cross-border insolvency amidst countries, by amending domestic legislation and entering into bilateral and multilateral treaties. In practice, I believe that dealing with the cross-border insolvency cases shall be based on the following starting points: 1. the creditors from different countries shall be treated equally; 2. the attitude of cooperation shall be adopted; and 3. the principle of mutual benefit and parity shall be persisted.Chapter Two is the study on the jurisdiction in the cross-border insolvency cases. This chapter dissertates in the following three aspects: The first aspect is the application of the jurisdiction theory of the traditional international civil and commercial affairs. The importance in ascertaining of the jurisdiction in cross-border insolvency is discussed firstly. The second aspect comes with the application of the jurisdiction theory of the traditional civil and commercial affairs in cross-border insolvency. Discussion has been made on the application of the jurisdictional bases of the"apanage"and of the citizenship as well as of"the will of the parties"in the cross-border insolvency. The reasons of the law conflict and the developing tendency are analyzed. I deem that the developing tendency in the jurisdiction coordination in countries is as follows: courts of many countries scrambling for jurisdiction of the cross-border insolvency cases becomes very tough, by enlarging its direct jurisdiction with all sorts of gist and principles while criticizing the"excessive jurisdiction"of another country. At the same time, each country has to restrain such psychology of expansion and to coordinate jurisdiction to mitigate the international conflicts in the jurisdiction. In discussing the issue of the third aspect, namely exploring measures to solve jurisdiction conflicts in cross-border insolvency, I deem that comprehensive consideration shall be given to balancing of the interests and the effectiveness, convenience, rationality and legality of the jurisdiction and so on in order to ascertain jurisdiction. Some traditional rules to solve the jurisdiction conflicts in the international civil and commercial affairs, such as"principle of jurisdiction by the court of first acceptance"and"forum non convenient", can be used in cross-border insolvency. Moreover, I deem that with regard to the character of cross-border insolvency, it is of great value to differentiate"major bankruptcy proceedings"and"minor bankruptcy proceedings"to ascertain jurisdiction in solving the jurisdiction conflicts in cross-border insolvency cases, and holds that cooperation should be taken between countries. Eventually, I analyze the feasibility of the rule of agreement on the election of forum in cross-border insolvency.Chapter Three is the study on law application in cross-border insolvency. Law application is the core tache of cross-border insolvency, involving complicated legal issues. In Section One, I dissertate about the influence by the differences of legislation on the essentials of insolvency to the law application. The legislations on the substantive essentials in different countries are widely divergent. For one insolvency case, the court in a country may hold that the bankruptcy proceedings shall be activated since the creditors are entitled to apply for bankruptcy or the debtor has cause of bankruptcy, while another country may hold that the debtor does not have cause of bankruptcy and the bankruptcy proceedings would not be activated. Hence, it is inevitable that the law conflicts may occur in the essentials of insolvency. I analyze the influence to the law application by the differences of legislation on defining the cause of bankruptcy, the different stipulation on the legal subject applying for bankruptcy and the different stipulation on the starting point of time of the bankruptcy proceedings. Section Two is on the law application in cross-border insolvency proceedings. I firstly analyze the two opinions in the law application in cross-border insolvency proceedings, which are unificationism and compoundism, then discusses law application of the principal proceeding and auxiliary proceeding, and eventually analyzes the law application of the parallel bankruptcy proceeding. In Section Three, I discuss the law application of the capability of the subject in cross-border insolvency. I comparatively analyze the law application of the bankruptcy capability of the natural person and that of the legal person, and the stipulations on the bankruptcy capability of the foreigners. For the law application of cross-border insolvency properties in Section Four, I analyze the law conflict in the scope of insolvency properties, discusses the law application of the scope of insolvency properties and the law application of the relevant rights, and discusses the law application of the exemption right, recalling right, right of contest and right of setoff in insolvency. The Section Five is on the law application of the credit of cross-border insolvency. I discuss three viewpoints of applying the law of the country where the bankruptcy is declared, of applying lex situs of the properties and of applying the applicable law of the original creditor's rights. The last section of this chapter discusses the law application on receivership and analyzes the law of the country where the receivership occurs and the application law of partition.Chapter Four is study on the recognition and enforcement of judgment in cross-border insolvency. This chapter includes three parts: The first part is the analysis of the extraterritorial effect of cross-border insolvency. As for the three theories of the extraterritorial effect of cross-border insolvency, which are doctrine of territoriality in bankruptcy, universalism of bankruptcy doctrine and doctrine of compromise in bankruptcy, I deeply analyze and discuss their meanings, character, theoretical basis as well as advantages and disadvantages, and analyze and appraise the developing tendency of the extraterritorial effect of cross-border insolvency by discussing the legislations on the extraterritorial effect of cross-border insolvency in the USA, UK, Germany, Switzerland, France and so on. The second part is the analysis on the theoretical basis and conditions of the recognition and enforcement of judgment in cross-border insolvency. After discussing the theoretical basis of the recognition and enforcement of judgment in cross-border insolvency, I analyze the conditions thereof. The third part is analysis about the means of recognition and enforcement in cross-border insolvency. The means of recognition and enforcement in cross-border insolvency include the petition of restarting the insolvency proceedings, to obey the foreign proceedings according to the comity principle, to institute auxiliary proceedings, to cite ordinary international aid, etc. Thereinto, I expatiate on the auxiliary proceedings stipulated in Section 304 of the Insolvency Law of the USA, and those stipulated in Article 426 of the Insolvency Law 1986 of UK, and make comment on the difference between the countries of civil law system and those of the common law system. Eventually, I analyze and discuss the developing tendency of the recognition and enforcement of judgment in cross-border insolvency. My opinion is, the developing tendency of the recognition and enforcement of judgment in cross-border insolvency is as follows: 1. the interpretation of"comity"becomes more extensive and flexible; 2. Each country or area attaches more importance to the protection of the interests of the foreign creditors; and 3. attention shall be paid to international coordination of the parallel existing cross-border insolvency proceedings.Chapter Five is the study on the legal coordination in cross-border insolvency. This chapter includes three sections: Section One is the study on the regional legal coordination in cross-border insolvency. I make comment on the achievements attained by European Union, such as the preliminary draft of the Bankruptcy Convention of the European Community 1970, and the Draft Convention on Bankruptcy, Winding up, Arrangements, Compositions and Similar Proceedings 1982, Istanbul Convention 1990, the European Union Convention on Insolvency Proceedings 1995, and the European Council Regulation on Insolvency Proceedings, and review the other regional agreements such as The Bustamante Code and the Nordic Bankruptcy Convention, as well as the Transnational Insolvency Project drafted by the American Law Institute in 2000. Section Two is the study on the international legal coordination inn cross-border insolvency. In this section, I discuss the efforts for forming Hague Convention Draft by the Hague International Private Law Conference, and make detailed comment on the UNCITRAL: Model Law on Cross-Border Insolvency, and moreover I discuss the efforts in promoting cooperation in cross-border insolvency by other international institutions, such as International Lawyer association, World Bank, International Monetary Fund. Section Three dissertates on the echo to the legal coordination in international cross-border insolvency by some countries. This section discusses the changes in the legislation on cross-border insolvency in Japan, the stipulation on"auxiliary action and other cross-border cases"in Chapter 15 of the Insolvency Law of the USA, and the adoption of the Model Law on Cross-Border Insolvency by the insolvency law of Mexico. I believe that, cooperation and development is the irreversible tidal current in contemporary age. The recognition and enforcement of uniform cross-border insolvency convention is the orientation of the common efforts of the international community. With the chief source of the Model Law on Cross-Border Insolvency by the UNCITRAL, Each country shall perfect domestic legislation on cross-border insolvency, and strengthen judicial cooperation, so that judicial resources can be best allocated and bring down the cost of action in cross-border insolvency. Therefore, the interests attainable by the creditors can be maximized.Chapter Six is the reflection about the legislation and practice of cross-border insolvency in China. This chapter includes three sections: Section One is the comment and analysis of the legal issues in the practice of the cross-border insolvency in our country. By analyzing the cases in the judicial practice in our country, I discuss the issue of extraterritorial effect in cross-border insolvency, the issue of jurisdiction, the law application and recognition of the litigating capability of the insolvency enterprises, the recognition and enforcement of judgment about cross-border insolvency, equal treatment given to the foreign creditors. From the above discussion, we can see the vacancy in legislation on cross-border insolvency in China. Section Two is the comment on the legal frame and the issues thereof in present cross-border insolvency in China. By analyzing the issues in legislation on cross-border insolvency of our country, I believe that, the issues about the cross-border insolvency in China are: (1) lack of stipulation on the extraterritorial effect of cross-border insolvency; (2) the stipulation on the jurisdiction of cross-border insolvency is not clear; (3) the stipulation on the law application of cross-border insolvency is not definite; and (4) lack of definite stipulation on the recognition and enforcement of the foreign insolvency proceedings. In the last section of this chapter, with regard to the above issues, I put forward consideration of perfecting legislation on the cross-border insolvency. I hold that improvement shall be made to extraterritorial effect, jurisdiction, law application and recognition and enforcement of the cross-border insolvency proceedings, etc. Thereinto, as for jurisdiction of cross-border insolvency, the cross-border insolvency cases shall be under centralized jurisdiction and importance shall be attached to the coordination of jurisdiction. I put forward a series of coordinating measures, including differentiating major insolvency proceedings and minor insolvency proceedings to ascertain jurisdiction, adopting the principle of jurisdiction by the court of first acceptance, adopting the principle of forum non conveniens, etc. In respect to the improvement of law application, I believe that, the law application of cross-border insolvency shall be stipulated in the means of partition. Firstly stipulate substantive issues as well as the procedural ones. Secondly partition shall be made to the substantive issues to ascertain law application. In regard to recognition and enforcement of the cross-border insolvency proceedings, I hold that, the legislation of our country shall stipulate definitely the system of recognition and enforcement of cross-border insolvency. Namely, the principle, condition, means of aid, available remedy measures and so on shall be definitely stipulated on recognition and enforcement of cross-border insolvency proceedings.The objective of the legal justice means that the rational requirements and claims can be met, at the same time the social life advancement and social cohesion degree can be improved and promoted, and the social civilization can continue and be maintained. For China, it is a critical and key step to develop advanced and effective legislation on cross-border insolvency. We shall perfect the law system of cross-border insolvency by using mature experience of other countries for reference. On the basis of protecting legal interests and rights of the parties of our country, the international economic cooperation shall be promoted on a even larger degree, so that it helps forming and operating the socialist system of market economy of our country. In the age of economic globalization, with the fast development of economy, more and more cross-border insolvency cases appear, and effective remedy shall be offered by the applicable law. The law conflicts in cross-border insolvency involves not only the procedural issues like jurisdiction and the recognition and enforcement of judgment, but also the selection and application of law, concerning the settlement of the substantive rights and obligations between the creditors and debtors. All of these issues have close relation with the principle of state sovereignty. Hence, the issues in law conflicts are even tougher. The settlement of all these issues relies on the common efforts of the international community. In modern society, any nation or country can not exist alone, and will inevitably have connection and intercommunion with other nation, countries and even the whole international community. Only by adhering to the principle of the international coordination, can we adapt ourselves to meet the requirements of the age, can the function of conflict law be brought into play, so that effective legal remedies can be offered in time for economic globalization. Such effort has begun and will never end.
Keywords/Search Tags:Cross-border Insolvency, Law of Conflicts, Jurisdiction, Application of Law, Recognition and Enforcement of Judgments, Legal Coordination
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