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Comparative Study Of The Cross-border Insolvency Recognition And Assistance System

Posted on:2020-09-23Degree:MasterType:Thesis
Country:ChinaCandidate:L LvFull Text:PDF
GTID:2416330623454136Subject:Law
Abstract/Summary:PDF Full Text Request
As cross-border insolvency cases increase,how should China treat foreign bankruptcy procedures? This is a question that we need to seriously consider.This paper is divided into four parts.Through researching on relevant theories of cross-border insolvency recognition and assistance system and comparing international advanced legal practice experience,to find problems existed in this system,and propose advices for improving this system.The first part of this paper introduces and sorts out relevant theories of this system.Cross-border insolvency recognition and assistance means that,due to the existence of cross-border factors,a country or a region recognizes a cross-border insolvency proceeding initiated by a court or a specific administrative agency of another country or another region,and provides necessary judicial assistances,to enable it to have legal effect in this jurisdiction,thereby implementing the insolvency property within this jurisdiction,or assisting the debtor to successfully complete insolvency reorganization.It has four characteristics,including foreign-related,complex,national autonomy and international unity.The establishment of this system was initially based on two basic theories,namely universalism and regionalism.Regionalism means that in a cross-border insolvency case,the debtor's property in different countries or regions shall be subjectto the jurisdiction of the court in which it is located.Universalism advocates that only the courts of the country in which the debtor is located may exercise jurisdiction over cross-border insolvency cases and exercise jurisdiction over all of the debtor's property.With the development of economy,these two traditional theories have revealed their drawbacks,and the cooperative territorialism and the modified universalism came into being.The cooperative territorialism advocates that,for a cross-border insolvency case,the courts of the country or region where debtor's properties are located may exercise jurisdiction and may appoint insolvency administrators by themselves.These insolvency administrators shall negotiate and cooperate with each other.The modified universalism argues that,for a cross-border insolvency case,the court where the debtor's property is located may,in its sole discretion,recognize the insolvency judgment made by the court of the country in which the debtor is located.That is,the courts where the debtor's properties are located shall consider whether the insolvency judgment will damage the legal rights of the creditor or the debtor and whether it will violate public policy.The second part of this paper comprehensively introduces the current international legal practice in this system.The second part is carried out in two aspects,namely,legislative practice and judicial practice.With regard to legislative practice,the author comprehensively introduces the UNCITRAL Model Law on Cross-Border Insolvency,the UNCITRAL Model Law on the Recognition and Enforcement of Insolvency-Related Judgments,and the relevant provisions of the EU Insolvency Procedures Regulations.For the international judicial practice in this system,the author collects the latest and most typical precedents from the United States,Australia and the United Kingdom by searching and consulting relevant articles.Through these precedents,we can see that the modified universalism is the theoretical basis of this system internationally.However,when it involves interests of local creditors or its own country,these counties may restrict the application of the modified universalism and refuse to recognize foreign proceedings or provide relevant reliefs.The third part of the paper sorts out the legal practice of China in this system,and compares it with the international legal practice and finds the problems still existing.First of all,the author sorts out the judicial sources of the system in China,and finds that the legal provisions directly related to the recognition and assistance of cross-border insolvency are only Articles 821 and 282 of the Civil Procedural Law of the People's Republic of China and Article 5 of the Enterprise Bankruptcy Law of the People's Republic of China.Secondly,the author introduces the typical precedents existing in China.It is found that in our existing precedents,there are both precedents recognizing foreign insolvency proceedings based on bilateral mutual legal assistance treaties,as well as precedents recognizing foreign insolvency proceedings based on the principle of reciprocity.On the whole,however,compared with international judicial practice,China's judicial precedent in this field is still too small.Finally,based on comparative research,the author finds that China still has the following problems in establishing and approving the system: First,the conditions for recognition and assistance of cross-border insolvency are not clear,mainly including its too hard to applicate the principle of reciprocity,and the specific meanings of "basic principles of law" and "social public interest" are not clear;second,the scope of recognition and assistance for cross-border insolvency is too narrow,which is reflected in time and property.Third,there is no remedy available in the process of recognition and assistance in cross-border insolvency;fourth,the qualities,rights and obligations of foreign insolvency administrators are not clarified.The fourth part of this paper is to advice for improving this system.The author firstly proposes that the system should first clearly establish its theoretical basis,and suggests that China should conform to the international trend and use the modified universalism as the theoretical basis for establishing and improving the system.After clarifying the theoretical basis of the system and combining with the international legal practice and the problems still existing in the system summarized in the third part,the author proposes to improve this system from the following four aspects: first,further clarify the conditions of cross-border insolvency recognition and assistance,it is necessary to appropriately soften the conditions for the recognition ofthe reciprocal relationship to transfer from the "recognition based on factual reciprocal relationship" to the "presumption of reciprocal relationship." The basic principles of law should be narrowly interpreted,that is,the basic principles of our insolvency law should be considered primarily when applicable.As for the application of the public policy exception principle,it should be regarded as the bottom condition,and it depends on whether the recognition and assistance of the insolvency procedure will violate the most basic principle of fairness in our country,and whether it will undermine our national interests as a whole.Only in these circumstances can we refuse to recognize and assist foreign insolvency proceedings.The second is to appropriately expand the scope of recognition and assistance for cross-border insolvency.Regarding the time frame,the author believes that it should not be limited to acknowledging the insolvency judgment or ruling that has already taken legal effect,but should also recognize and assist the ongoing foreign insolvency proceedings.As for the scope of property,the author believes that the courts of our country should determine the scope of the debtor's property from the perspective of the largest possible assistance in corporate restructuring.The second is to appropriately expand the scope of recognition and assistance of cross-border insolvency.With regard to the extent of time,the author believes that it should not be limited to recognize insolvency judgments that has already taken legal effect,but should also recognize and assist the ongoing foreign insolvency proceedings.As for the scope of property,the author believes that the courts of our country should determine the scope of the debtor's property from the perspective of the largest possible assistance in corporate restructuring.The third is to determine the remedies for the cross-border insolvency recognition and assistance system in China,which are divided into interim relief measures and remedies available after recognition of foreign bankruptcy proceedings.It mainly includes suspending the execution of the bankrupt property,selling it to prevent the loss of the bankrupt property,suspending the debtor to dispose of the bankrupt property in any form,and suspending the litigation of the debtor.The fourth is to clarify the access conditions and rights and obligations of foreigninsolvency administrators.First,it is necessary to clarify that the foreign insolvency administrator has the same legal status as the insolvency administrator of China.The entry of a foreign insolvency administrator requires that it provide material that can prove the authenticity of its identity.The rights it should enjoy should include,but is not limited to,the disposition or transfer of bankrupt property in the field of our country,the participation of the debtor in relevant litigation,the suspension of related litigation for the benefit of creditors,and the right to apply for appropriate relief in our courts.Its obligations should include complying with the laws of our country,accepting inquiries from our courts,and providing relevant information to our courts.
Keywords/Search Tags:Cross-border insolvency, Recognition, Assistance, Foreign insolvency administrator
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