The Normative Path For Cross-border Bankruptcy Recognition In China

The lagging legislation of China's cross-border bankruptcy system has obviously hindered China's international economic and trade transactions and China's economic development strategy in recent years,which has caused a huge impact on commodity production,international transportation and economic consumption in China and even in various countries around the world.As a direct result,economic and trade exchanges have been reduced and business cooperation opportunities have been missed;large shopping malls have been closed to consumers.First,the primary issue facing China in the area of cross-border insolvency recognition is how to deal with the source of conflict in cross-border insolvency proceedings-the issue of parallel insolvency proceedings.Due to the development of international economic and trade exchanges,the mobility between enterprises has increased significantly,and many enterprises have set up offices or deposited property around the world,and the insolvent debtor may be in However,in order to maximise the value of the debtor's assets and to protect the interests of all creditors,countries have advocated cooperation in parallel proceedings between different countries,thus giving rise to the current international This system distinguishes between primary and secondary bankruptcy proceedings by the "centre of main interests" rule,emphasising cooperation between proceedings and allowing for the reasonable articulation of parallel bankruptcy proceedings.At present,it will face contradictions and confusion when dealing with parallel bankruptcy proceedings.Secondly,the current jurisdictional setting in China is too narrow to cover all cross-border bankruptcy cases that are actually related to China,and cannot exercise jurisdiction over some of the related cross-border bankruptcy cases,which is not conducive to the protection of our creditors' interests.The current international frontier practice is to set up jurisdiction under the framework system with the aforementioned "center of main interests" as the core,and should be used in all countries that also adopt the framework system.The framework system should have universal extraterritorial effects in all countries that also adopt the framework system.Third,China's Enterprise Bankruptcy Law currently uses "judicial assistance treaties,international treaties" and "reciprocal relations" as the elements of recognition of foreign insolvency judgments.Such a strict recognition condition based on the principle of national sovereignty is no longer in line with the current economic development situation in China,nor is it in line with the international status of China today.At present,the international community has long abandoned the "reciprocal relationship" as the recognition condition,and basically holds an open,cooperative and positive attitude towards the recognition of extraterritorial bankruptcy procedures.Fourth,China's Enterprise Bankruptcy Law does not specify the manner and extent of relief and assistance that can be provided to recognized foreign insolvency proceedings.The value of relief and assistance provisions is to provide predictability and optionality to foreign representatives and litigants,mainly to provide for specific ways to preserve the debtor's property located in China,so as to ensure that the value of the debtor's assets will not be unnecessarily diminished due to the process of our courts reviewing whether to recognize foreign insolvency proceedings,which is also the need to protect the interests of all creditors.The current international practice is to divide the relief and assistance into provisional relief measures and formal relief measures based on the standard of time point,during the time period from the application for recognition of foreign proceedings by our court to the decision of recognition or otherwise by our country,we can provide corresponding provisional relief measures to preserve the value of the debtor's assets;after the decision of recognition by our country,specific formal relief measures should be provided to help realize the debtor's assets After the recognition decision is made in China,specific formal relief measures should be provided to help realize the realization and transfer of the debtor's assets,or provide assistance to suspend other proceedings of the debtor in China.First,the concept of "center of main interests" should be introduced and used as the core to construct primary and secondary bankruptcy procedures that are in line with the international frontier,so as to reasonably respond to cross-border parallel bankruptcy procedures;second,the jurisdictional setting should be improved under the framework of the center of main interests.China may enjoy the jurisdiction to open primary bankruptcy proceedings based on the debtor's center of main interests being located in China,and may also enjoy the jurisdiction to open secondary bankruptcy proceedings based on the debtor's property being located in China or having an establishment in China,the extraterritorial effects of which will have extraterritorial effects in countries and regions that also adopt the framework of the Model Law.Third,to expand the scope of recognition from foreign bankruptcy judgments to the entire foreign bankruptcy proceedings,to delete the pre-requisites of "judicial assistance treaties,international treaties" and the "principle of reciprocity" for recognition review,and to adopt a more positive,open and cooperative attitude towards recognition of cross-border bankruptcy proceedings.At the same time,public policy exceptions should be set up to deny recognition to those that may affect China's national security,national interests and public interests.Fourth,provide for specific relief and assistance measures after recognition of foreign insolvency proceedings,distinguishing between provisional relief at the time of application and formal relief after recognition by time;and providing more comprehensive and superior relief for primary and secondary proceedings,and providing necessary relief and assistance for secondary proceedings.