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Chapter 7 - Principles and Harmonisation

Published online by Cambridge University Press:  22 September 2018

Reinhard Bork
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Summary

Building on the results of the previous deliberations, this chapter of the book will devote attention to the benefit of principles for harmonisation (or unification) of laws. In this context, (I) the need for harmonisation must be explained, (II) the addressees of the request for harmonisation must then be identified and (III) the relevance of principles of cross-border insolvency law for harmonisation must then be discussed.

THE NEED FOR HARMONISATION

A trend towards harmonisation of national and cross-border insolvency laws can be observed on a worldwide scale. The reasons for this trend will be examined in detail below. At this point, it suffices to cite the following passage from the UNCITRAL Guide to Enactment and Interpretation:

However, national insolvency laws by and large have not kept pace with the trend, and they are often ill-equipped to deal with cases of a cross-border nature. This frequently results in inadequate and inharmonious legal approaches, which hamper the rescue of financially troubled businesses, are not conducive to a fair and efficient administration of cross-border insolvencies, impede the protection of the assets of the insolvent debtor against dissipation and hinder maximization of the value of those assets. Moreover, the absence of predictability in the handling of cross-border insolvency cases can impede capital flow and be a disincentive to cross-border investment. … Fraud by insolvent debtors, in particular by concealing assets or transferring them to foreign jurisdictions, is an increasing problem, in terms of both its frequency and its magnitude. The modern, interconnected world makes such fraud easier to conceive and carry out.

It is easy to see from this text that the need for harmonisation, stemming from disparities in national (cross-border) insolvency laws, is closely connected to many of the principles described and analysed in this book, for instance efficiency, procedural justice, predictability and optimal realisation of the debtor's assets.

Given the fact that no worldwide legislator exists who could implement a global cross-border insolvency law binding on all nations, the harmonisation of national cross-border insolvency laws by national (or regional) legislators is the appropriate way forward, leading to the same effects, namely that the same rules apply in all (participating) countries.

Type
Chapter
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Principles of Cross-Border Insolvency Law
, pp. 237 - 256
Publisher: Intersentia
Print publication year: 2017

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