For information only - not an official document
18 July 2013
UN Commission on International Trade Law adopts insolvency texts on cross-border insolvency and on directors' obligations
VIENNA, 18 July (UN Information Service) - On 18 July 2013, the United Nations Commission on International Trade Law (UNCITRAL) adopted two insolvency texts - revisions to the Guide to Enactment of the UNCITRAL Model Law on Cross-Border Insolvency and part four of the UNCITRAL Legislative Guide on Insolvency Law addressing the obligations of directors in the period approaching insolvency.
The revisions to the Guide to Enactment of the Model Law are designed to address uncertainty that has arisen in cross-border insolvency cases applying the Model Law in a number of States. The revisions provide more information and guidance on the application and interpretation of certain key concepts of the Model Law relating, firstly, to the characteristics of foreign proceeding susceptible of recognition under the Model Law and second, to the factors relevant to determining the debtor's centre of main interests for the purposes of recognition. Since the work on "centre of main interests" is relevant to the interpretation and application of the EU Insolvency Regulation, it is hoped that revision of the Regulation currently being considered will be in step with the work completed by UNCITRAL.
The work on directors' obligations forms part four of the Legislative Guide on Insolvency Law, a text providing guidance to States with respect to legislative issues that should be addressed in an effective modern insolvency law. The new recommendations concerning directors are designed to establish obligations that will be enforceable if insolvency proceedings commence and involve examination of the conduct of directors in the period when the company began to experience financial distress. Timely action by directors can often be key to minimizing the effects of such financial distress and avoiding a slide into insolvency that will affect the interests of all stakeholders. Incentives to take that action can be an important element of an insolvency law.
The Commission also noted the updating of the UNCITRAL Model Law on Cross-Border Insolvency: the Judicial Perspective, a text adopted in 2011 to provide assistance to judges with respect to questions arising under the Model Law, illustrated by reference to court decisions issued in a number of States. The updating reflects the most recent jurisprudence on the Model Law, as well as the revisions to the Guide to Enactment.
The final version of these three texts will soon be available at http://www.uncitral.org/uncitral/uncitral_texts/insolvency.html.
The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. UNCITRAL also provides technical assistance to law reform activities, including assisting Member States to review and assess their law reform needs and to draft the legislation required to implement UNCITRAL texts. The UNCITRAL Secretariat is located in Vienna, Austria.
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