PART 5
February 2010
OTHER PRACTICAL ASSISTANCE AVAILBLE
43.0.36 – Other practical assistance – scope of this Part
This part of the Chapter gives advice and information concerning the procedures relating to cross-border insolvency outside the UK, where the relevant international procedures (the EC Regulation on Insolvency Proceedings 2000 and the UNCITRAL Model Law on Cross Border Insolvency) (see Parts 3 and 4, respectively) do not apply.
The EC Regulation applies to all EU Member States except Denmark (http://europa.eu/abc/european_countries/index_en.htm#$35200).
A list of those countries that have incorporated the Model Law can be found here (http://www.uncitral.org/uncitral/en/uncitral_texts/insolvency/1997Model_status.html#$35287).
Where the country in which the bankrupt has his/her affairs does not appear on either of those lists then the official receiver may make use of the information and advice in this Part of the Chapter.
43.0.37 Cross border insolvency within the UK
Part 4 of Chapter 42 explains the procedure for obtaining assistance in cross-border insolvencies within the UK – these being procedures specifically legislated for in the Act [note 1].
43.0.38 Cross border insolvency and the Channel Islands and Isle of Man
The position regarding insolvents with interests in the Channel Islands or Isle of Man is explained in paragraphs 43.0.46, 43.0.47 and 43.0.48, respectively.
43.0.39 Cross border insolvency within the EU
Where the bankrupt has interests in a member state of the European Union (EU) then the provisions of the EC Regulation on Insolvency Proceedings should be used to seek the co-operation of the foreign courts (see Part 3). The current members of the EU are listed in paragraph 41.6 of Chapter 41.
43.0.40 Cross border insolvency where UNCITRAL Model Law on Cross-Border Insolvency applicable
Where the bankrupt has interests in a country that is outside the EU, but has implemented the UNCITRAL Model Law on Cross Border Insolvency (see Part 4) then the provisions of the law implementing the UNCITRAL Model Law should be used to seek the co-operation of the foreign courts. A list of the countries that have implemented the Model Law is provided at paragraph 42.35.
43.0.41 Cross border insolvency and assistance between courts
Where the insolvent has interests in a country that is outside the EU, and has not implemented the UNCITRAL Model Law then the assistance of the foreign court may be granted under local laws providing for assistance to be granted in relation to English insolvency proceedings. Many of the countries that are in the Commonwealth (www.thecommonwealth.org/.../) are likely to have provisions in their laws to allow the courts to provide assistance or recognise an English bankruptcy proceeding.
43.0.42 Assistance of foreign courts
The courts having jurisdiction in relation to insolvency law (see paragraph 43.0.43) in the countries outlined in paragraph 43.0.44 are required to assist the courts in the UK in insolvency matters.
Generally speaking, the court has discretion regarding if and, if so, how it will provide the requested assistance. The court may choose to accept the jurisdiction of the UK court and, where this is done, the court cannot then decide matters according to local law.
In addition to providing assistance, the courts of those countries normally have the power to recognise a foreign insolvency judgement.
43.0.43 Definition of “insolvency law”
For the purposes of the part of the Act dealing with cross-border cooperation, “insolvency law” is defined as [note 2]:
43.0.44 Relevant countries and territories
The countries designated for the purposes of the mutual assistance aspects of the Act [note 3] are:
43.0.45 Recognition of English and Welsh insolvency proceedings overseas (amended July 2014)
Apart from where the provisions of the EC Regulation on Insolvency Proceedings 2000 (see paragraph 43.0.49), UNCITRAL Model Law on Cross Border Insolvency (see paragraph 43.0.40) or the mutual co-operation provisions available as a result of section 426 apply (see paragraph 43.0.41), the recognition of bankruptcy proceedings overseas is based on case law.
Where the official receiver requires the recognition of an insolvency overseas, he/she may use, with appropriate amendments, the precedent application at Annex E. It is possible that the foreign court might reject this approach and request that the official receiver make a formal application for assistance including, possibly, a letter of request from a court in England and Wales. In these circumstances, it is likely that local legal representation will be required to assist with the format and presentation of the application.
To assist in process, Annex G is a package containing all the documents necessary for an application to the courts of Jersey (including an application to the English court for a letter of request) which may be amended and used as appropriate, following the guidance of the official receiver’s lawyers.
43.0.46 Channel Islands – Jersey
Jersey has a reciprocal arrangement with the UK in that courts having jurisdiction in relation to insolvency law in Jersey are required to assist the courts having corresponding jurisdiction in the UK [note 4] [note 5].
Where the official receiver wishes to apply for an order to take proceedings in relation to property situated, or a cause of action existing, in Jersey then he/she may follow the procedure outlined in paragraph 43.0.45.
Jersey is not part of the European Union and, therefore, the EC Regulation on Insolvency Proceedings (see Part 3) does not apply. Jersey has not implemented the UNCITRAL Model Law on Cross-Border Insolvency (see Part 4, and is not expected to do so.
43.0.47 Channel Islands – Bailiwick of Guernsey
The Bailiwick of Guernsey consists of the Royal Court of Guernsey, the Court of Alderney and the Court of the Seneschal of Sark, being all the inhabited islands of the Channel Islands except Jersey (see paragraph 43.0.46 for information on Jersey).
The Bailiwick of Guernsey has a reciprocal arrangement with the UK in that courts having jurisdiction in relation to insolvency law in The Bailiwick of Guernsey is required to assist the courts having corresponding jurisdiction in the UK [note 6].
Where the official receiver wishes to apply for an order to take proceedings in relation to property situated, or a cause of action existing, in The Bailiwick of Guernsey, he/she may follow the procedure outlined in paragraph 43.0.45.
The Bailiwick of Guernsey is not part of the European Union and, therefore, the EC Regulation on Insolvency Proceedings (see Part 3) does not apply.
The Bailiwick of Guernsey has not implemented the UNCITRAL Model Law on Cross-Border Insolvency (see Part 4).
The High Court of the Isle of Man is required to assist the courts having bankruptcy jurisdiction in the UK [note 7].
Where the official receiver wishes to apply for an order to take proceedings in relation to property situated, or a cause of action existing, in the Isle of Man, he/she may follow the procedure outlined in paragraph 43.0.45.
The Isle of Man has a special relationship with the European Union, set out in Protocol 3 to the United Kingdom's Treaty of Accession. Under this special relationship the Island is neither a Member State nor an associate member of the European Union. It is also worth emphasising that, although the Island's relationship with the EU is through the UK, the Isle of Man is an internally self-governing dependent territory of the Crown and is not part of the UK.
43.0.49 Legalisation of documents (amended October 2013)
A foreign court or other organisation may require the legalisation of a document (most likely, a winding-up order or bankruptcy order) prior to, for example, giving access to an asset or providing information regarding an insolvent’s affairs.
This legalisation (sometimes referred to as obtaining an “apostille” certificate is a service provided by the Foreign and Commonwealth Office for a fee of £36 (including delivery). Details can be found at their web-site (www.fco.gov.uk/.../).
Where the official receiver is unable to provide an original of the document to be legalised (this being increasingly likely due to the scanning of documents), it will be necessary to have the document certified prior to applying for legalisation. Guidance on the process for certification can be found here:
https://www.gov.uk/legalisation-document-checker/y/court-of-bankruptcy-document
43.0.50 Decision to take concurrent proceedings
If, when attempting to deal with assets situated overseas the official receiver is unable to take advantage of the provisions outlined elsewhere in this Chapter, or to obtain the voluntary co-operation of the bankrupt, then the only remaining option may be to open concurrent bankruptcy (insolvency) proceedings in the country in which the asset is situated.
Given the likely need to employ solicitors (not least to explore whether there are grounds to open such proceedings) (see paragraph 43.0.51), and the additional resources that will be required to deal with the proceedings themselves, the costs should be weighed against the potential benefit to the estate before embarking on this course of action.
43.0.51 Legal assistance in cross-border insolvency
In most cases dealt with by the official receiver involving property or information abroad, it is likely that specialist legal advice will be required, particularly where legal proceedings are envisaged. There is no central list of solicitors who have experience in dealing with cross-border insolvency and official receivers are advised, to seek a recommendation from his/her own legal advisors.
Before instructing solicitors, the official receiver should have regard to the procedure for sanction as outlined in Chapter 32.1 – Employment of Agents and 32.2 - Solicitors.
The official receive will require prior authority from Technical Section if a debit balance will be incurred in pursuing asset or asset-related enquiries abroad.
[Back to Part 4 – Practical assistance available under the UNCITRAL Model Law on Cross Border Insolvency]