(a) In relation to each type of insolvency procedure available in the legal system of this economy, to what extent are the claims of foreign creditors recognised in the context of administration of that procedure?

 

Foreign creditors are recognised to the same extent as any other creditors (Sec.318). Foreign creditors of a company which is incorporated outside Pakistan and carried on business in Pakistan can prove their claims in the winding up proceedings of the company as an unregistered company.

(b) What principles or rules apply to the recognition and admission of claims by foreign creditors? (for example

(i) Are claims by foreign creditors subject to particular rules in relation to priority of payment?

 

No.

(ii) Do foreign creditors have to satisfy special or additional requirements in order for their claims to be admitted?)

 

No.

(c) What law is applied to establish the validity of foreign claims?

 

The governing law agreed upon in the agreement under which the debt arose or Pakistan law where the Court comes to the conclusion that Pakistan law is the most closely connected to the lender.

(a) To what extent does the insolvency law of this economy claim jurisdiction over assets of a corporate debtor situated abroad?

 

A company incorporated outside Pakistan but carrying on business in Pakistan may be wound up as an unregistered company in Pakistan. All creditors of the company which is being wound up whether they are at the place of incorporation or in the towns where it has branches are entitled to a share in the assets.

(a) To what extent do the rules of private international law of the legal system of this economy recognise insolvency procedures commenced in foreign jurisdictions?

 

Insolvency procedures commenced in foreign jurisdictions are not recognised in Pakistan.

(b) Under what circumstances, if any, may orders or judgments resulting from foreign insolvency procedures or administrations be recognized or enforced in the legal system of this economy?

 

Any foreign judgement or order including a judgement or order resulting from foreign insolvency proceedings may be recognised in one of two ways-(a) if judgement or order is given in a state which has reciprocal status notified as such by Pakistan, then the order can be enforced as a decree or (b) in all other cases through proceedings filed in Pakistan on the basis of the judgement or order, which judgement or order will be deemed to be conclusive unless the defending party can show that the order or judgement was not given by a court of competent jurisdiction or on the merits of the case or is opposed to natural justice or has been obtained by fraud or is in breach of Pakistan law or is prima facie founded on an incorrect view of international law.

(a) What recognition is accorded in the legal system of this economy to the status and capacity of insolvency administrators (for example trustees, liquidators, receivers) appointed in foreign insolvency procedures?

 

No recognition is accorded to liquidators etc. appointed in foreign insolvency procedures. To obtain recognition ancillary winding up proceedings would have to be initiated in Pakistan.

(b) To what extent are foreign insolvency administrators entitled to claim, take control of, and realise or deal with property of the corporate debtor situated within the jurisdiction of the legal system of this economy?

 

Foreign insolvency administrators would first have to initiate ancillary winding up proceedings in Pakistan and control of assets of the corporate debtor in Pakistan would depend on the orders of the court in such proceedings.

(a) To what extent does the legal system of this economy recognise the validity of rights of security asserted by foreign creditors over assets of the corporate debtor?

 

To the same extent as of any local creditor.

(b) Are any special rules applicable to determine the validity, extent and ranking of such security rights?

 

No.

(a) To which international conventions having some application in insolvency matters is this economy a party?

 

None, to our knowledge.

(b) When were these conventions entered into, and what other states are parties?

 

See (a) above.

(c) What observations can be made about the practical results achieved under these international instruments?

 

See (a) above.

(a) Are there any other particular issues or special problems in the field of cross-border insolvency, not included in the answers supplied above, which have presented themselves before the courts of the legal system of this economy?

 

No.

(a) Is the government of this economy aware of the UNCITRAL model law on cross-border insolvency, approved by the United Nations in June 1997?

 

Yes.

(b) If so, are you aware of whether the government has any proposals to enact the terms of the model law?

 

This has not been made part of domestic law so far nor does any imminent proposal for doing so seem likely.