Some of the participants at the UNCITRAL’s Expert Group Meeting on Asset Tracing and Recovery in Insolvency Proceedings (from left to right): Steven Philippsohn (UK), Héctor Sbert (Spain), David Mizrachi (Panama), Henrique Forssell (Brazil), Christopher Redmond (USA), Shaun Reardon-John ( BVI), Karen Fellowes (Canada), Debby Lim (Singapore) and Jeremy Lightfoot (Hong Kong).
On 16 December 2022, during the 61st session of UNCITRAL Working Group V (insolvency Law) held in Vienna, I attended two interesting events: (i) a conference devoted to the 25th anniversary of the UNCITRAL Model Law on Cross-Border Insolvency; and (ii) Expert Group Meeting (EGM) on civil asset tracing and recovery in insolvency proceedings, convened by the UNCITRAL Secretariat.
It was a good opportunity to meet several fellow FraudNet members, as well as many other insolvency and asset tracing and recovery (ATR) specialists and discuss the future of ATR in insolvency contexts.
Conference commemorating the 25th anniversary of UNCITRAL’s Model Law on Cross-Border Insolvency
UNCITRAL’s Model Law on Cross-Border Insolvency (MLCBI) has been a pioneering text helping national insolvency laws address the challenges of cross-border insolvencies. Its importance cannot be underestimated given the complexity to harmonize globally such area of law. The MLCBI has now been implemented in 53 States throughout 56 jurisdictions (with EU Member States being among those “bad students” that have, unfortunately, shown less interest in following suit). It helps tackle international cooperation in insolvency matters, thus increasing the odds of saving viable business and liquidating non-viable ones, and to address the risk of asset concealment and dissipation to the prejudice of the insolvency estate.
During the morning of the 16 December, a conference was thus arranged to commemorate such anniversary and to review the application, interpretation, and use of the text. More than 100 people took part in the conference in person, including professors, judges and practitioners.
Expert Group Meeting on Asset Tracing and Recovery in insolvency proceedings
During the EGM on civil asset tracing and recovery in insolvency proceedings that took place in the afternoon, several working documents addressing civil asset tracing and recovery in insolvency proceedings were discussed.
UNCITRAL wishes to offer States a range of non-prescriptive ATR choices for legislation in their countries to, if necessary, improve their domestic ATR-related legal framework, especially with reference to cross-border ATR cooperation.
Such initiative was already discussed at an International Colloquium (Vienna, 6 December 2019) and in UNCITRAL’s Commission before being assigned to UNCITRAL Working Group V (Insolvency Law) in 2021.
A survey a ATR tools where discussed including:
- Preventive and provisional measures.
- Measures dealing with the identification of the insolvency estate assets.
- Control over the use and disposal of the assets of the insolvency estate and the operation of the debtor’s business.
- The powers of the insolvency representative.
- Avoidance actions.
- Actions against directors, shareholders and other related persons.
- Tools specifically designed for insolvency proceedings in an a cross-border context, particularly:
- Assistance to foreign insolvency proceedings and foreign representatives as per the MLCBI.
- Recognition of the foreign proceeding and the foreign representative (of both main and non-main insolvency proceedings).
- Direct communication and cooperation among courts and insolvency representatives.
Work will go on for the continued refinement of the definition of effective ATR tools in an insolvency context until the issuance of final recommendations to the States.
Congratulations to UNCITRAL and particularly to José Angelo Estrella-Faria, Samira Musayeva, Benjamin Herisset and Maria-Angeliki Giannakou for their excellent work and great cooperation.
Hector Sbert 