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On Evolution Of Cross-border Insolvency Protocol And Its Application In China

Posted on:2013-10-27Degree:MasterType:Thesis
Country:ChinaCandidate:C Y CangFull Text:PDF
GTID:2256330374474573Subject:International Law
Abstract/Summary:PDF Full Text Request
Cross-border Insolvency Protocol (“Protocol”) is an agreement usually stipulatesthe communication and coordination between courts and other parties, and frequentlyemployed in cases of cross-border insolvency. The first Protocol emerged in the1991Maxwell case. A Protocol normally is negotiated and drafted by insolvencyrepresentatives authorized by the courts, and then approved by the respective courtsby means of “court order.” In the early age of Protocols, they are usually achievedamong the courts in the US, Canada and UK. This is due to the particularity of thecommon law system. As for judges in civil law countries, they are unable to sign orapprove such Protocol without expressly authorized by the country’s statues. However,in the Nakash case, a Protocol firstly entered into force between a common lawcourt-the US court, and a civil law court-the Israeli court. After the EC InsolvencyRegulation become effective in2002, many Protocols further emerged among thecivil law countries in Europe.Studying why the Protocol has evolved so much despite its evident limitations,one can find that the evolution of Protocols has inspired the development of theories,and the development of theories has in turn driven the new cross-border insolvencylegislation both on the domestic and international level. This results in even sounderlegal grounds for applying more Protocols. Protocols also uniquely help to address thethree most significant problems in cross-border insolvency cases, which are: cross-border reorganization, intercompany claims and the cross-border realization ofthe debtor (or debtors in a group)’s assets. Such context has rendered the Protocol asthe “pivot” of the cross-border insolvency’s theoretical and practical developments.Nowadays, value of Protocols has been widely recognized by the academics. In thedebate of “New Pragmatism” before and after year2000, while famous scholarsdisputed about the mode of cross-border insolvency legislation, they all advocate theimportance of employing Protocols as the proper way of cooperation and coordination.More and more courts have accepted Protocol, and employed it in more and moresignificant cases. Therefore, it is foreseeable that researching on the application ofProtocols will continue to be of value in the future.Protocols typically contains clauses such as: communication and informationsharing between different courts and representative (administrators), representative’sright to appear in a foreign proceeding, assets identification and preservation, and thereconciliation and treatment of claims. Articles of Protocols have been evolving allalong, and have achieved a systematic and mature level. The successful using ofProtocol in the Lehman case testifies that Protocol has evolved from a temporarydevice meeting emergency to a powerful tool resolving the particular problems incross-border insolvency.After answering why the Protocol has evolved so dramatically, the Protocol’sposition in the picture of cross-border insolvency and the development history of theProtocol’s typical clauses, this thesis is to finally answer whether China needs suchmechanism. Firstly, drawing from the foregoing analysis, it is reasonable to concludeProtocol will also be useful to cross-border insolvency cases in China. Secondly, thelessons of the recent Taizi Milk case and North Pole case may also support this vision.China is now still in lack of both the practice of Protocols, and a legal basis ofpracticing one. Therefore, this thesis is to provide some suggestions to help theChinese judicial branch and insolvency practitioners be better prepared in the futurecases. The suggestions include the amendment of China’s Bankruptcy Law, judicial explanation of China’s Bankruptcy Law, an inter-region arrangement between HongKong and mainland China, and a Guideline drafted by the Chinese Bar Association.
Keywords/Search Tags:Cross-border Insolvency Protocol, Cross-border Reorganization, Intercompany Claims, Lehman Case, China’s Judicial Assistance inCross-border Insolvency
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