Study On Extraterritorial Effect Of Cross-Border Insolvency

Cross-border insolvency refers to bankruptcy with foreign-related factors or international factors.In cross-border insolvency cases,creditors,debtors or insolvent assets are usually located in two or more countries.The extraterritorial effect of the bankruptcy proceedings is mainly manifested in two aspects: first,whether the bankruptcy declaration of a court in a country has universal extraterritorial effect;second,whether the bankruptcy procedures outside the domain can be recognized and enforced.The problem to be solved by the extraterritorial effect of cross-border insolvency is that when a debtor is declared bankrupt by a country's court,can it include its bankruptcy assets outside into its own bankruptcy proceedings and be uniformly distributed.The purpose of cross-border insolvency proceedings is to maximize the fair compensation of all creditors.Whether the bankruptcy procedure of a country has extraterritorial effect is the core of dealing with cross-border insolvency cases and is closely related to the bankruptcy goal of achieving fair treatment of all creditors.This article is mainly divided into four parts.The first part is the definition and specificity analysis of cross-border insolvency.The author reviews a large amount of data and makes a comparative study of the cross-border bankruptcy theories that are well-known in the field of theory and finds that there has been considerable controversy over the issue of the extraterritorial effects of bankruptcy.Judging from the doctrines,jurisprudence and legislative status of various countries,there are mainly two theories: First,regional principles,and second,universal principles.The core of disputes boils down to the selection and application of regional principles and universal principles.In practice,the purely regional principles and universal principles have encountered difficulties.The new pragmatism between the two offers an eclectic approach,that is,on the basis of not giving up the guiding principles of the universality principle,the bankruptcy property is managed and integrated most effectively.While safeguarding the national interest,it also promotes international cooperation in cross-border bankruptcy.The second part is about the legislative status qua and judicial practice of the out-of-scope effect of China's bankruptcy declaration and raises questions.The provisions of our country's extraterritorial effect on cross-border insolvency only appear in Article 5 of the Bankruptcy Lawof the People's Republic of China,but due to the fact that the provision is too principled,it causes inconsistency in the judicial practice in our country.In addition,China does not have special cross-border insolvency legislation,nor does it have a dedicated bankruptcy court.In practice,the court can only quote relevant clauses such as the “Enterprise Bankruptcy Law” and the “Civil Procedure Law” when dealing with similar cases.The judges are free to judge to some extent.Therefore,it is imperative that China should learn from the international advanced experience in cross-border insolvency legislation and improve and reform China's cross-border bankruptcy legal system.The third part is to compare and analyze the status qua of foreign legislation and judicial practice.The author analyzes and introduces typical international conventions,experiences in regional legislation,and cross-border insolvency legislation in some countries to provide references for the improvement of the effectiveness of the system of bankruptcy in China and judicial practice.It mainly deals with the "Model Law on Cross-border Insolvency" formulated by the United Nations Commission on International Trade Law,the "Regulations on EU Bankruptcy Procedures" formulated by the European Commission,and the useful practices of the United States,Japan,and Germany in cross-border insolvency.The fourth part is the enlightenment of our unified cross-border bankruptcy legislation.I read a large amount of literature,analyzes and integrates the research results of other scholars and combines my own thinking.I propose the principles that China can refer to in the field of bankruptcy,and proposes specific solutions.