Cross-border Insolvency Legislation And Applicable

With the fast development of multinational trade and investment, the world sees an increasing of the cross-border insolvency cases day by day. As it has a great impact on the economy and judicial sovereignty of the countries concerned, intense conflicts among these countries will inevitably occur. There exits much dissimilarities in different insolvency laws, which reflect different social policies and objectives. Apart from that, there is no uniform legal framework to deal with cross-border insolvency cases. The above-mentioned situations have posed great challenges to the international cooperation and coordination in cross-border insolvency field. To push the international investment onto an orderly path, the international community and many countries have explored ways to cooperate and coordinate in the cross-border insolvency field and have made great achievements ever since. This dissertation focuses on the following fields:the exploring of cross-border insolvency theories, the legislation innovation and judicial practices in the international community and especially in the developed countries represented by the United States and some EU counties. The dissertation also probes into the issue of how to consummate China's cross-border insolvency legislation.The first part of the dissertation is about the theories on the cross-border insolvency legislation. Universalism and Territorialism were traditional theories followed by most countries to address cross-border insolvency issues. By now, due to their unconquerable defects, the two theories cannot play dominant roles in the practices. Modified Universalism takes universalism as its ultimate objective and also assimilates the reasonable factors in Territorialism. It has dominated over Cooperative Universalism in the process of clash with it. As an important part of a domestic insolvency law, the cross-border insolvency law needs to balance between international cooperation and the already-existed domestic insolvency order. Therefore, what to choose—Universalism or Territorialism is usually decided by the aim of the insolvency policy adopted by that country. At present, since Modified Universalism is adapted to the economic globalization, it has played a leading role in the world community unified legislation practices of the cross-border insolvency and exerted far-reaching influence on the cross-border insolvency legislation reform and judicial practices carried out in many countries. The second part of the dissertation is about the cross-border insolvency reforms in the United States and some European countries. The United States has lay much emphasis on the international cooperation and coordination in cross-border insolvency. The fact that the 15th chapter in the 2005 Bankruptcy Law replaced the item 304 in the 1978 Bankruptcy Law represented an important step towards universalism in the United States. Considering the co-legislation inside the Union can only provide a legal framework, the EU countries represented by the United Kingdom and Germany have carried out the corresponding legislation reform at home to meet the needs of the international cooperation and coordination. Although the United States and some European countries lay great emphasis on the international cooperation and coordination in their cross-border insolvency innovations, they still make certain restrictions in the legislation to protect their national interests. At the same time, their reforms, which influenced by the international unified legislation, show much similarity in many aspects. But it does not mean the united global legislation has been established.The third and forth parts focus on the judicial practices in the United States and some European countries. The consummation in legislation has provided an effective mechanism to resolve cross-border insolvency related cases. What is more it has provided a set of predictable legal framework for the cooperation of courts and the protection of foreign creditors. The courts in the United States and some European countries basically keep to the legislators' original intention to enhance the international cooperation in the cross-border insolvency field. As a result, they are usually open in explaining and application of certain key clauses especially some proviso. They will also be cooperative in recognizing and executing foreign insolvency proceedings unless it may impair the domestic legal principles or the basic policies. Through extending the main concept of the center of main interests in the current law and applying cross-border agreement, the courts in the United States and some European countries not only provide a feasible way to resolve the cross-border corporate group insolvency related cases but also make up for the defects existing in the present law. Of course, their judicial practices also reflect some problems in the legislation.The last part is about the consummation in China's cross-border insolvency legislation. As far as the cross-border insolvency concerned, the new enterprise bankruptcy law abandoned the theory of territorialism and adopted modified universalism. The 5th article of the new enterprise bankruptcy law provides for that the insolvency proceedings opened in China will have extraterritorial effect and the law also recognizes and assists in the foreign insolvency proceedings. However, the law has room for improvement, especially in prescribing specifically how to provide cooperation and assistance. The defects will hinder the judicial practices and cannot tally with our fast developing economy. It requires us to learn from the experiences of international community legislation and the reform in the United States and EU to further ameliorate China's cross-border insolvency legislation on the basis of protecting our basic interests in order to provide legal foundation for the international cooperation in cross-border insolvency field.Although cross-border insolvency involves complicated legal problems and conflicts of interest, it has become an obvious trend to carry out maximum international cooperation in this field on the basis of maintaing a nation's own interests. It can not noly help to address cross-border insolvency problems orderly and efficiently but also lay foundations for the further cooperation in the future which will enhance the development of international trade and investment.