The United Nations Commission on International Trade Law Working Group V (Insolvency Law) is meeting this week 16-20 December 2024 in Vienna.
Its two main issues for consideration are the legal issues arising from asset tracing and recovery in insolvency proceedings; and the applicable law in insolvency proceedings.
Also, UNCITRAL reports that Australia – represented by Mr Scott Atkins – has suggested the preparation of an updated Guide to Enactment and Interpretation of the UNCITRAL Model Law on Cross-Border Insolvency. Australia adopted the Model Law in 2008. UNCITRAL Model Law on Cross-Border Insolvency with Guide to Enactment and Interpretation
As UNCITRAL explains, under the heading of “possible future work”, the Guide to Enactment and Interpretation serves an important role as a complement to the Model Law. Australia suggests a review of the Guide “to determine appropriate areas for updating in light of the development of the Model Law since its adoption” and “in light of the number of jurisdictions which have adopted legislation based on or influenced by the Model Law. Since the Guide’s most recent update in 2013, forty jurisdictions have adopted such legislation”.
The recommendation is that Working Group V discuss this proposal at its December 2024 session and that it be considered for adoption at the 2025 session of UNCITRAL.
Comment
What appears to be Australia’s new-found interest in insolvency law, and cross-border insolvency, contrasts with the fact that Australia has not considered for adoption the UNCITRAL Model Law on Enterprises Group Insolvency of 2019, nor the UNCITRAL Model Law on the Recognition and Enforcement of Insolvency Related Judgments of 2018.
While the adoption of the Model Law on Cross-Border Insolvency in 2008 has no doubt been useful and necessary, its use may not be that significant and its interaction with other laws has been problematic, for example with maritime law.
Of greater relevance to law reform is the UNCITRAL Legislative Guide on Insolvency Law of 2004 and in particular the Guide to insolvency law for micro and small enterprises, of 2021. This guidance would be invaluable in any comprehensive review of insolvency law as recommended by the 2023 PJC Report on Corporate Insolvency, to which the government is still yet to respond.
The UNCITRAL meeting this week should decide upon Australia’s proposal.
