11. CROSS-BORDER CONSIDERATIONS

Cross-border insolvencies occur when the trading and business activities of a corporation or corporate group extend across two or more countries and the corporation or a member of the corporate group becomes insolvent. It is important and it may be vital in a rescue context, that the relevant insolvency regimes provide for co-operation in the administration of the affairs of the debtor corporation.

11.1 Cross-border insolvency legislation
The ADB report recorded that the RETA economies would benefit from a detailed consideration of, and a multilateral approach, to cross-border insolvency issues. It has become essential to cross-border trade and commerce that the insolvency law of a country permit and respond to requests from another jurisdiction for recognition, assistance and co-operation. This is the essential thrust of the UNCITRAL model law on cross-border insolvency.
The ADB report noted that there was a lack of knowledge generally of the problems of, and the different approaches to, cross-border insolvency. This should be of particular concern to the economies in the region, since most, if not all, are economically dependant on regional and international trade and commerce. With one or two exceptions, none of the insolvency law regimes of the economies in the region contained any provision relating to this issue. Further, it did not appear that any of the economies were contemplating the adoption of the UNCITRAL model law nor, indeed, of making any attempt to respond to the need.
A survey of the five economies involved in this second stage of the project has revealed that none of them appear to have taken any initiative in the development of a cross-border insolvency co-operation regime.
11.2 Regional co-operation and collaboration
On another aspect of 'cross-border' relations, the ADB report suggested that all the economies in the region may benefit from the establishment of a semi-permanent forum for the exchange of experience, information, new developments and education in the area of insolvency law and practice. Such a forum could bring together, on an annual or bi-annual basis, government policy makers, legislators, judges, officials and insolvency practitioners.
11.3 Conclusions and proposals
- It is desirable that the economies in the region adopt uniform cross-border insolvency legislation that equips each of them with similar and reciprocal provisions regarding recognition, relief and co-operation between and with the courts, regulators and administrators of each economy.
- It would be beneficial if a forum in the region was established for the exchange of information and developments in insolvency law and practice.