Teaching academic - Emeritus Professor Harry Rajak

What is this Course About?

International Insolvency comprises two broad areas and we will be covering both. First there is the law and practice developed by a large number of countries to deal with the legal issues which arise where an insolvency – whether of an individual or a company – spills over from one country another.
The simplest example is that of a liquidator appointed to an insolvent company registered in country A and where the company owns assets in country B. The liquidator’s duty is to recover those assets for the benefit of all the creditors, but the claim to recover those assets may be disputed by someone in country B, and even if not, recovering those assets may require special authority or may be resisted on state administrative grounds. So litigation may be necessary to resolve the dispute. Where does this litigation take place?  Which system of law governs the litigation? These two questions – known as questions of jurisdiction and choice of law – are central to this first branch of International Insolvency Law and is commonly known as Cross Border Bankruptcy or Cross Border Insolvency (the terms Bankruptcy and Insolvency are generally interchangeable). Those of you who have taken a course in Conflicts of Laws (also known as Private International Law) will, most likely, be familiar with these issues.

The second branch of this course concerns the attempts made by two or more countries to bring certain aspects of their respective insolvency laws and practices into line. Again, a simple example. If country A has a procedure for the appointment of a liquidator and country B has a different procedure for the same thing, countries A and B might agree that a liquidator appointed in one of their countries may practise as a liquidator in the other country without any further formalities. Such agreements may be entered into between two countries and then are usually described as a bilateral treaty, or they may be entered into between several countries, when they would be described as multilateral treaties. This branch may be described as international insolvency. A major
purpose of such treaties is to try to reduce the necessity for litigation in cross border bankruptcy disputes.

In both branches of international insolvency it is most likely that a national court will be the forum for the resolution of the dispute, unless what may be described as a transnational court – a court that originates from the will of, and carries the authority of, all countries involved – has been established with all requisite staff and infrastructure. Where this is done, it is most likely to be set up by an international multilateral treaty. The best example here is probably the European Court of Justice which was established by
the treaty which established what was first called the European Economic Community, and what is now called the European Union.

Finally, naturally, this course is about insolvency, the same insolvency as some of you may have studied in courses devoted to the insolvency of just one country and where there are few, if any, cross border or international problems. For those of you who may not have studied any insolvency, we will begin with a review of the major principles, and practices which constitute, near enough, the contents of most national insolvency systems. This will also give us an opportunity, which I hope will be of benefit to you all, to review why we have the principles we do have, and what the underlying economic and political and even social reasons are for a system of bankruptcy and its principles.

The Program:

We will meet as a class on 12 occasions each for 2 hours, in February in the morning and afternoon of Tuesday 17th and 24th, Wednesday 18th and 25th and Thursday 19th and 26th.  So it will be quite concentrated but I hope I can structure it with a mix of lectures, discussions and problem analysis which will break it up, keep it lively and also enable us to have some fun! I hope you will commit yourselves to preparation in advance of the classes. I am very conscious of the need to avoid overloading you, so my plan is to ask you to do a fair amount of work – essentially reading and thinking about what you are reading - in advance of the start of the course, then a smallish amount on the Tuesday and Wednesday evenings of both weeks and a bigger chunk in the 4 days
between the Thursday of the first week and the Tuesday of the second week of classes. I will be available in my room in the faculty (not yet allocated) between 10 a.m. and noon on Monday 16th, Friday 20th and Monday 23rd February.

The Materials (in outline)

I will use as a useful general summary of an insolvency system and as an introduction to the comparative intricacies of cross border insolvency, A Global View of Business Insolvency Systems, published by the World Bank and Martinus Nijhoff publishers. The  University bookshop has ordered copies and it should be available from late January. Please read – in advance of the start of the course - the first three chapters of this book. This will be a guide for our discussion on Tuesday 17th February. I would also like you to read a short article which I wrote, called The Culture of Bankruptcy. This is attached to this Introductory Memorandum.[1]
I hope this will give you a sense of the wider context of insolvency systems, why we need them, how they compare and how easy or difficult it might be to resolve conflicts which concern an insolvency which spans at least two legal jurisdictions.

There will be more materials, so please remember to check your MyUni regularly, at least once each day. I will try to give you as much time for prescribed reading in advance of classes. I will also draft and ask you to consider hypothetical problems which will help to tease out some of the problematical areas in cross border and international insolvency. It would be ideal if you have these problems with you – either in written or electronic form – when we discuss them, and the same is true of the other materials,
especially statutory provisions and decided cases. I assume that material of this kind is available to you through electronic sources.

The Course Plan:

17/2/15 - Topics for Discussion: Introductory lecture(s); Discussion of prescribed reading (see page 3 above) Consideration of a hypothetical problem

Essential Reading For Future Classes: Pages 121-181, Global View EU Regulation on Insolvency Proceedings


18/2/15 - Topics for Discussion: Discussion of 121-164, Global View; Introduction to the European Union, the EU Regulation on Insolvency Proceedings and the case-law of the EU

Essential Reading For Future Classes:  Re Brac Rent-A-Car [2003] 1 W.L.R. 1421 Daisytek-ISA [2003] BCC 562, 984; [2006] BCC 841 Re Eurofoods [2004] BCC 383, [2005] BCC 1021; [2006] BCC 397


19/2/15 - Topics for Discussion: Summary lecture/discussion of terms important to an understanding of the EU Regulation Discussion of EU case law Discussion of problem; Introduction to the Uncitral Model Law

Essential Reading For Future Classes:  Uncitral Model Law on Cross Border Insolvency Australian Cross Border Insolvency Act 2008
Mason, Cross-Border Insolvency Law* Brown, Beyond the Uncitral Model Law* Pages 203-265, Global View Rubin v. Eurofinance [2013] 1 A.C. 236


24/2/15 - Topics for Discussion: Essay Topics submissions and discussion Implementation of the Uncitral Model Law Discussion of Rubin’s case Discussion of the views of Mason and Brown Introduction to the problem of groups Introduction to cross border insolvency case law Assignment of case presentations

Essential Reading For Future Classes: Rajak, Corporate Groups and Cross Border Bankruptcy [2008-09] 44 Texas Int’l L J 521
Felixstowe Dock [1989] QB 360 Re Maxwell, Barclays v. Homan [1992] BCC 757 and its sequel, Re Maxwell Communication 170 Bankruptcy Reporter 800, affd 186 BR 807 (593 F. 3d 1036. Section 426, UK Insolvency Act 1986 Re Dallhold [1992] BCC 394
Re HIH: McGrath v. Riddell ([2008] BCC 349 Cambridge Gas v. Official Committee [2006] B.C.C. 962 PWC (Appellant) v. Saad [2014] UKPC 35 Singularis v. PWC [2014] UKPC 36

25/2/15 - Topics for Discussion: Discussion of corporate groups  Concept of rendering assistance to foreign litigants Student presentations of cases

Essential Reading For Future Classes: Westbrook, Global Solution [2000] 98 Mich. LR 2276 Westbrook, Multinational Enterprises [2002 76 ABLJ 1 Boshkoff, Gloomy Thoughts, [1994] 72 Wash. ULQ 931


26/2/15 - Topics for Discussion: Student presentations (continued) Hypothetical problem on rendering assistance


*These articles are contained in Omar (ed.) International Insolvency Law: Themes and Perspectives, 2008, p. 27 and Omar (ed.) International Insolvency Law: Reforms and Challenges, 2013, p. 387.        

This course will be assessed on the basis of an essay of between 5,000 and 10,000 words and an open book examination. You will be advised, at the latest by the start of this course, of the date by which the essay will have to be submitted. The topic will be one chosen by yourselves and each of you must come up with a provisional suggestion for the topic of your essays in the class on Tuesday morning, 24th February. I want each of you to hand in on that morning a very brief summary of around 100 words of the topic on which you plan to write your essay. If you want any advice in advance of this, please come and see me on any of the dates I will be available in my room (see above). Then on Tuesday morning, 24th February, each of you will have up to 5 minutes to tell the rest of us what you are going to write on and the rest of us will have a few minutes to offer any helpful suggestions. 

Essay: 45%

Exam:  45%

Class Presentation: 10%