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    7894

    Uploaded by

    praharshitha
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    13 views1 page

    7894

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    © All Rights Reserved
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    The introduction of the principles of unity and universality has resulted in a legal framework for cross-

    border insolvency cases within the European Union under which a single set of insolvency rules can
    apply to the enforcement of all creditors’ claims, and decisions of the competent authority have
    universal application. The Insolvency Regulation and the two Directives do not seek to harmonise
    national legislation concerning reorganisation measures and winding-up proceedings, rather they ensure
    mutual recognition and coordination of these procedures by member states. The principles of home
    country control, minimum harmonisation and mutual recognition - forming the core of the market
    integration principles for financial markets - have also been transposed in the field of insolvency
    procedures and constitute the basis of the Winding-up Directive for insurance undertakings and the
    Windingup Directive for credit institutions. In particular, the home country and mutual recognition
    principles - being introduced by the First and Second Banking Co-ordination Directives,46 respectively -
    are extended to the insolvency of credit institutions

    The main objective of the Insolvency Regulation is to ensure that cross-border insolvency proceedings
    operate efficiently and effectively within the European Union. Another objective is to avoid incentives
    for parties to transfer assets from one member state to another and/or to choose the jurisdiction in
    which to initiate insolvency proceedings in order to obtain the most favourable legal position (“forum
    shopping”).48

    the United Kingdom. Recent case law from the BCCI affair83 suggests that the courts will apply the
    provisions of English law to such proceedings, even where the effects of doing so mean a different
    outcome from the potential results of applying the relevant provisions of foreign law. Foreign liquidation
    proceedings may be recognised in the United Kingdom in a number of instances, namely where the
    winding-up is conducted under, or recognised by, the law of the place where the company is
    incorporated; where the company has submitted to the jurisdiction of a foreign court; or, where the
    company carried on business in a foreign jurisdiction. Such recognition, however, may be conditional on
    the requirement that such grant of recognition would not be contrary to public policy, constitute fraud,
    or entail an attempt to enforce foreign penal or revenue law through foreign proceedings. Furthermore,
    there is a general principle in English law that the courts do not generally recognise foreign proceedings
    where they result in an outcome creating a material difference in the treatment of creditors as opposed
    to the potential outcome of such proceedings under English law.

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