A Study On Grounds For The Refusal To Recognize Foreign Insolvency Proceedings

In the tide of globalization,countries around the world are getting closer and closer,the problem of cross-border insolvency in economic exchanges has also become increasingly prominent.Regardless of whether it is based on the nature of insolvency as the overall procedure for liquidation of all property or the actual need to promote international cooperation,the legal regulation of cross-border insolvency is becoming increasingly important.As an important link in the handling of cross-border insolvency cases,the recognition of foreign insolvency proceedings is the basis for subsequent case processing,and how to stipulate and apply grounds for refusal to recognize foreign insolvency proceedings is crucial to the integration of the proceedings and the protection of national interests.The first part of the article defines the certain concepts related to foreign insolvency proceedings,clarifies that the essence of insolvency proceedings is a collective procedure for the purpose of liquidation or reorganization,while the essence of recognition of the foreign insolvency proceedings lies in the recognition of the factual status of the opening of foreign proceedings,which is not limited to the recognition of the final insolvency declaration decision.Therefore,when refusing to recognize foreign insolvency proceedings,the decisions made by foreign countries should not be interpreted in a rigid and restrictive manner.Because insolvency law has the intersecting nature of public and private law and the nature of collective proceedings,the grounds for refusal to recognize foreign insolvency proceedings are slightly different from that of the general civil and commercial judgments.Although under the guidance of universalism,foreign insolvency proceedings should be recognized as much as possible to promote the collection of properties on a global scale,the reality of regionalism makes it legal and reasonable to refuse to recognize foreign insolvency proceedings under certain circumstances.The second part combines the international documents such as the Model Law on Cross-Border Insolvency and the regulations and practices of countries such as the United States,Japan,and China,and summarizes common grounds for refusal to recognize foreign insolvency proceedings.It is mainly the determination of the public policy exception,the protection of the interests of local creditors and the reciprocal relationship.Specifically,the public policy exception clause should be applied cautiously.The procedural aspect focuses on protecting the rights of all parties to participate in the insolvency proceedings on an equal basis.The entity attaches importance to the protection of basic principles of the insolvency law such as the automatic suspension and the protection of basic rights such as privacy.From the perspective of creditor protection,first of all,the status of domestic and foreign creditors is guaranteed to be equal in the same procedure.Later,at the recognition stage,the legal rights and interests of domestic creditors should be protected from the perspective of procedural justice.The characteristic of the principle reciprocity that may cause retaliation between countries is inconsistent with the pursuit of a high degree of international cooperation in cross-border insolvency cases and the principle of reciprocity is not prescribed as a ground for refusal to recognition in most major countries.The third part summarizes China's current legislative and judicial status and finds that China's existing legal provisions are too thin and principled.The more prominent problem is that when refusing to recognize foreign insolvency proceedings,the object of recognition is ambiguous so that the scope of application in practice is narrow,the determination of reciprocal relationship is comparatively strict,and the scope of public policy exception is comparatively wide.After drawing on international experience and combining with the actual situation of China,it proposes corresponding improvement suggestions,that is,adheres to the modified universalism,adopts a two-step model of recognition and relief,and applies prudently to the grounds for refusal during the recognition stage.It includes that the object of recognition is foreign insolvency proceedings,adopts the presumed reciprocity principle and adds “obviously” in the provision as a requirement to restrict the application of public policy exception.