The current recession has focused attention once again upon the difficulties which arise in cross-border insolvency cases, and upon the extent to which the existing powers of the courts of any given country are sufficient to enable them to assist in the restructuring of businesses or in a fair distribution of their assets. Unsurprisingly, attention in recent years has focused on the UNCITRAL Model Law and there is no doubt that the framework which it provides, for recognition, the consequences (automatic and discretionary) of recognition, and cooperation and communication between courts, is welcome.

However, a degree of caution is required. First, many jurisdictions, including the Hong Kong SAR, have yet to adopt the Model Law. Second, much of the Model Law is discretionary; it provides a framework, but leaves much to be worked out by local courts (leading the New Zealand Law Commission to describe it as an essentially procedural measure in its 1999 report on cross-border insolvency). Third, although some countries have adopted the Model Law as an exclusive code (eg the United States), in other countries, such as the United Kingdom, it co-exists with other regimes and defers to some of them; in particular, EU measures.

The purpose of this article is to explore the difficulties inherent in cross-border cases, the key principle - universality - which underlies the common law approach, and the manner in which effect has been given to that principle. The Model Law is touched upon and attention is drawn to other legislative intervention in this area.

The Problem of Securing Cooperation

The issues arising in cross border insolvencies can be defined in terms - jurisdiction, choice of law, recognition / enforcement ?which are similar to those arising in any dispute having a conflict of laws dimension. However, the nature of insolvency proceedings does not lend itself to a straightforward application of ordinary principles of private international law, as Lord Hoffmann recently confirmed when delivering the judgment of the Privy Council in Cambridge Gas Transportation Corp v Official Committee of Unsecured Creditors of Navigator Holdings plc [2007] 1 AC 508 (Navigator).

The issue was whether effect should be given to an order of the Bankruptcy Court for the Southern District of New York, which had confirmed a plan of reorganisation and sought the assistance of the Isle of Man courts in giving effect to one of its terms; namely, a vesting of the shares in Manx company in the debtor's creditors. It was submitted that the giving of assistance would breach well-established principles of private international law. Lord Hoffmann disagreed, distinguishing insolvency proceedings from proceedings concerned with the determination of private rights. He described the central characteristic of insolvency proceedings as being not the determination of rights, but the collective enforcement of claims; the means by which assets are realised and distributed to creditors. Where insolvency proceedings have an international dimension, a conflict of laws issue could not be resolved by recourse to principles applicable to the determination of private rights.

That is not to say that there is no applicable principle. However, there are difficulties in its formulation and application. In providing for collective enforcement, each country makes its own choices: what assets are to be made available for the satisfaction of claims; is the estate to be augmented, for example, by allowing for the claw back of assets; what securities are to be recognised and with what effect; should certain securities be set aside; in what manner are the assets to be distributed; should some creditors be given priority; ought others to be subordinated, or excluded altogether?

These choices will reflect local policy and insolvency culture. It is these factors, together with the natural caution of judges, which have contributed to the difficulties in securing cooperation between jurisdictions in insolvency matters: see Lord Hoffman, 'Cross Border Insolvency', The 1996 Denning Lecture; Lord Millett, 'Cross-Border Insolvency: The Judicial Approach' (1997) International Insolvency Review 99.

Rationalising a Solution

At least two theoretical approaches to cross-border insolvency have been propounded: universalism and territorialism. Universalism requires the administration of a debtor's affairs to be conducted so far as possible by or subject to the supervision of one court on a worldwide basis, with the help and assistance of the courts of other countries. Territorialism requires administration to take place by or subject to the supervision of each national court that has control of assets of the debtor, applying local law to the administration of those assets and their distribution.

The early authority usually cited in support of universalism is Solomons v Ross (1764) 1 H Bl 131n, where the English judge ordered that the proceeds of a debt garnisheed in London be remitted to Dutch trustees. Its influence has been felt in England, Hong Kong and elsewhere: Ku Chia Chun v Ting Lei Miao [1998] 3 HKC 119 at 135 (Godfrey JA). In Navigator, Lord Hoffmann emphatically affirmed its importance and, within 18 months, did so again in Re HIH Casualty and General Insurance Ltd; McMahon v McGrath [2008] 3 All ER 869 (HIH) in the following terms:

"The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the eighteenth century. That principle requires that English courts should, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company's assets are distributed to its creditors under a single system of distribution."

Lord Hoffmann, therefore, recognised universalism as a principle or rule, whilst acknowledging in this passage and elsewhere that it was not absolute and that the court's approach needed to be pragmatic.

Universalism has two limbs: recognition of the foreign office holder and the provision of assistance. Ku Chia Chun is an example of recognition, acknowledging the authority of the foreign office holder to bring proceedings to collect local assets; also Re Irish Shipping Ltd [1985] HKLR 437. Absent express statutory authorisation, the assisting court is confined to providing assistance under local law provisions.

However, the authorities demonstrate that the ambit of assistance which may properly be given is wide. For example, local courts can assist in the getting in of local assets by the appointment of a local receiver, or by the use of anti-suit injunctions to prevent local litigants from derailing insolvency proceedings or achieving an unfair advantage (Modern Terminals (Berth 5) Ltd v States Steamship Company [1979] HKLR 512; [1977-1979] HKC 194; Banque Indosuez v Ferromet Resources [1993] BCLC 112; the discussion in Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104), or by the appointment of local provisional liquidators (see the discussion of the I-China cases in Re Legend International Resorts Ltd [2005] 3 HKLRD 16; [2006] 2 HKLRD 192), or by the enforcement of foreign plans even without a local parallel scheme: Navigator. Inter-court communication is also possible and protocols have become commonplace: Re T&N Ltd [2005] BCC 982.

Assistance, however, is not automatic. Universalism is a powerful factor in its favour; but the provision of assistance is discretionary and will be given only where it is proper to do so. Thus, in restructuring cases, assistance is unlikely to be given where the debtor has taken no steps, or where it appears doomed to fail, or where the proposals are plainly unfair because, say, they discriminate on grounds of nationality. In bankruptcy or winding up cases, assistance is unlikely to be given where the insolvency law of the requesting court is plainly incompatible with the principles underlying the insolvency law of the local court because, say, it is discriminatory or substantially departs from the pari passu rule. In cases where inter-court communication is sought, it may be declined if the local court considers that it may prejudice the conduct of future hearings before it.

Remittal of Assets for Distribution

Consistently with universalism, the conclusion of any ancillary insolvency proceedings ought to be the remittal of local assets for distribution in the principal proceedings. However, in England the existence of a common law jurisdiction to order remittal has been controversial and remains unsettled. In Re Bank of Credit and Commerce International SA (No 10) [1997] Ch 213, Sir Richard Scott V-C held that there was no jurisdiction, at least where the distribution schemes in each country were not substantially the same.

The issue arose again in HIH, where Australian liquidators requested English provisional liquidators to remit the proceeds of English assets, reinforced by letters of request from the New South Wales court. Remittal mattered because there was a material difference between the Australian and English distribution schemes in their treatment of certain creditors. On the issue of whether there was a common law jurisdiction to order remittal, the House of Lords split 2:2, with Lord Phillips expressing no view but agreeing that the assets should be remitted. Lord Hoffmann and Lord Walker were of the opinion that the common law jurisdiction existed and should be exercised. Lord Scott and Lord Neuberger were of the opinion that there was no common law jurisdiction, but that
s 426 of the Insolvency Act 1986 (which provides for assistance to be given to the courts of designated countries - principally existing or former Commonwealth countries, including Hong Kong) supplied the jurisdiction and that it should be exercised.

It is unfortunate that there was not a majority in HIH in favour of a common law jurisdiction to order remittal. Whilst a few countries have provisions analogous to s 426, or have adopted the Model Law which expressly provides for remittal, many places (including Hong Kong) have not and would need to rely upon a common law jurisdiction. It is true that there are authorities from other countries which support the jurisdiction: Re Union Theatres Ltd (1933) 35 WALR 89; Re Air Express Foods Pty Ltd [1977] Qd R 107; Turners and Growers Exporters Ltd v The Ship 'Cornelis Verolme' [1997] 2 NZLR 110; Gavigan v Australasian Memory Pty Limited (1997) 8 NZCLC 261,449; Re National Benefit Assurance Company [1927] 3 DLR 289. However, the authorities are not entirely consistent. Where remittal has been ordered, it is usually net of expenses and the claims of creditors whose claims are preferred under local law.

Conclusions

The Model Law provides a defined framework within which recognition is afforded and assistance given in a speedy and cost effective manner. For this reason, it is to be welcomed. However, it is important not to overstate its impact. Bar the vexed question of remittal, much for which the Model Law provides is capable of being provided for under the common law. Moreover, it leaves much to the discretion of the courts in terms which make it doubtful whether different results would be achieved, depending upon which system is invoked. The exercise of discretion in cross-border cases is likely to require a consideration of the same factors, whether under the common law or the Model Law. The Model Law encourages cross-border assistance, but it is at least arguable that the courts might already have got there.

Finally, and as an illustration of the coexistence in one country of a number of sets of provisions dealing with the same subject matter, it is worth pointing out that, in addition to the common law, s 426 and the Model Law, the United Kingdom has also (by the implementation of EU measures) the European Regulation on Insolvency Proceedings 2002, the Insurers (Reorganisation and Winding Up) Regulations 2004 and the Credit Institutions (Reorganisation and Winding Up) Regulations 2004. It is not possible to cover their substantive effects in this article. However, it should be noted first, that where they apply, they are mandatory and displace other systems; second, that their effects are more wide-ranging than the provisions of the Model Law.

Peter Arden QC
Barrister, England and Wales
Enterprise Chambers

跨境破產案件中的承認與協助 
御用大律師Peter Arden指出，在處理跨境破產案件時， 雖然現時仍存在不明確的地方，但最近有了積極的發展。

目前的衰退使得人們再度關注跨境破產案件中產生的問題，以及任何特定國家的法院在多大程度上擁有充分權力，使它們能夠協助重整業務或者公平分配業務資產。不足為奇的是，近年來人們的關注焦點是《聯合國國際貿易法委員會示範法》；毫無疑問，該法律提供關於承認、承認的後果（自動和酌情性質）以及法院間的合作與溝通的框架，並受到歡迎。

然而，我們需要一定程度的審慎。首先，許多司法管轄區（包括香港特區）尚未採納 《示範法》。其次，《示範法》的許多內容屬酌情性質；它雖然提供了框架，但許多問題卻要留待地方法院去解決（這使得紐西蘭法律委員會在其1999年的跨境破產報告中將其描述為實質上的程序性措施）。再者，雖然有些國家已經採納《示範法》作為專屬法典（例如美國），但在其他國家（例如英國），它與其他制度並存，並須參照其中的一些制度，尤其是歐盟的規定。
本文旨在探討跨境案件中存在的固有困難，關鍵原則—普遍性（該原則強調採取普通法方法），以及該原則生效的方式。我們將探討《示範法》，並提請讀者注意該領域的其他立法行動。

在取得合作方面存在的問題

跨境破產案中出現的問題可以通過管轄權、法律選擇、承認/執行等辭彙加以界定，這類似於在具有衝突法因素的任何爭議中所出現的問題。然而，破產法律程序的性質使之不能簡單地適用普通的國際私法原則，Lord Hoffmann近期在Cambridge Gas Transportation Corp v Official Committee of Unsecured Creditors of Navigator Holdings plc [2007] 1 AC 508 (Navigator)案件中下達樞密院判決時確認了這點。

爭議點在於，是否應當令紐約南區破產法院的一項命令生效，該法院確認了重組計劃，並要求曼島法院協助令其中的一項條款生效，亦即將Manx公司的股份轉歸債務人的債主。有人認為，提供協助將會違反早已確立的國際私法原則。Lord Hoffmann不同意這種看法，而是將破產程序與涉及確定私有權的程序區分開來。據他描述，破產程序的核心特徵並非確定權利，而是申索的集體強制執行，通過這種方式變現資產並將其分配給債權人。假如破產程序帶有涉外因素，依靠確定私有權所適用的原則並不能解決法律衝突問題。

這並不是說沒有適用的原則。然而，原則的制定與應用存在困難。在對集體強制執行作出規定時，每個國家均作出自身的選擇：哪些資產可用於滿足申索；財產是否會增大，例如，允許收回資產；哪些抵押品獲得承認，會起甚麼作用；是否應當擱置某些抵押品；通過何種方式分配資產；是否應當給予某些債權人優先權；其他債權人是否應當位於較次的級別，或者被完全排除？

上述選擇將反映出本地政策及破產文化。正是上述因素，加上法官與生俱來的審慎，導致在司法管轄區在破產事宜方面難以實現合作：參見Lord Hoffman, 'Cross Border Insolvency', The 1996 Denning Lecture; Lord Millett, 'Cross-Border Insolvency: The Judicial Approach' (1997) International Insolvency Review 99。

方案合理化

現時至少存在解決跨境破產的兩種理論：普遍主義和地域主義。普遍主義要求在全球範圍內盡量在一個法院的監督之下對債務人的事務進行管理，並取得其他國家法院的協助。地域主義要求在對債務人的資產擁有控制權的各國法院的監督之下開展破產管理，並對資產及其分配適用本地法律。

通常引用以支持普遍主義的較早典據是Solomons v Ross (1764) 1 H Bl 131n，該案中的英格蘭法官命令將在倫敦獲取的一項債務的收益移交荷蘭受託人。該判例在英格蘭、香港及其他地區產生了顯著影響：Ku Chia Chun v Ting Lei Miao [1998] 3 HKC 119 at 135 (Godfrey JA)。在Navigator案件中，Lord Hoffmann著重肯定了其重要意義，並在18個月內的Re HIH Casualty and General Insurance Ltd; McMahon v McGrath [2008] 3 All ER 869 (HIH)案件中，再度以下列語句加以強調：

「本人認為，適用於本案的主要國際私法規則是（修正後的）普遍原則， 自18世紀以來，它都是貫穿全英格蘭跨境破產法律的主線。該原則規定，在符合爭議與英國公共政策的前提下，英格蘭法院應當與首要清盤的所在國的法院合作，以確保公司的全部資產通過統一的分配體系分配給其債權人。」

因此，Lord Hoffmann將普遍主義承認為一項原則或規則，但亦在這段文字及其他地方承認：這並非絕對，而法院必須採取務實做法。

普遍主義具有兩個層面：承認外國公職人員；提供協助。Ku Chia Chun 案件便是承認的例子，該判例承認外國公職人員有權提起法律程序收繳本地資產，亦見Re Irish Shipping Ltd [1985] HKLR 437一案。假如沒有明確的法定授權，提供協助的法院僅限於依照本地法律條文提供協助。

然而典據顯示，可以適當提供的協助範圍頗為廣泛。例如，本地法院可以通過指定當地接管人或運用反訴訟禁制令，防範本地訴訟人破壞破產程序或取得不公平的優勢，從而協助取得當地資產（Modern Terminals (Berth 5) Ltd v States Steamship Company [1979] HKLR 512；[1977-1979] HKC 194；Banque Indosuez v Ferromet Resources [1993] BCLC 112；Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104中的討論），亦可指定本地臨時清盤人（參見Re Legend International Resorts Ltd [2005] 3 HKLRD 16；[2006] 2 HKLRD 192中對I-China案件的討論），或者執行外國計劃，即使沒有本地的相應計劃Navigator。此外，還可以開展法院間的溝通，而簽立協定已經成為常見的做法： Re T&N Ltd [2005] BCC 982。

然而，協助並非自動產生。普遍主義是支持協助的強力因素，但提供協助屬於酌情性質，只有在適當的時候才會提供。因而在案件重組時，假如債務人未採取任何措施，或者似乎必定會敗訴，或是建議顯失公平（比如說，建議基於國籍因素而存在歧視），便不太可能提供協助。在破產或清盤案件中，假如請求法院的破產法律明顯與本地法院的相關破產法律不相容（比如說，它具有歧視性質或顯著偏離均等規則），亦不太可能提供協助。在需要法院間溝通的情形中，假如本地法院認為可能會妨礙今後實施審理，亦可能不予協助。

移交資產用於分配

在採取普遍主義的情況下，任何從屬破產程序的最終結果都應當是移交本地資產，以便在首要法律程序中分配資產。然而在英格蘭，是否存在命令移交的普通法司法管轄權，這一直存在爭論，並且仍未解決。在Re Bank of Credit and Commerce International SA (No 10) [1997] Ch 213案件中，Sir Richard Scott V-C認為，不存在這樣的管轄權，至少在各國分配方案大不相同的情況下是如此。

HIH案件中再度出現這個問題。在該案中，澳洲清盤人要求英格蘭臨時清盤人移交英格蘭資產的收益，並以新南威爾士法院的請求函作為支持憑據。移交事關重大，因為在對待某些債權人的問題上，澳洲與英格蘭的分配方案存在重大差異。在爭論是否存在命令移交的普通法司法管轄權時，上議院出現2:2的意見分歧，Lord Phillips未表達任何觀點，但贊同移交資產。Lord Hoffmann和Lord Walker認為，存在這樣的普通法司法管轄權，並應當行使該權力。Lord Scott和Lord Neuberger認為，並不存在普通法司法管轄權，但《1986年破產法》第426條（該法律規定向指定國家（主要是現有或先前的英聯邦國家，包括香港特區）的法院提供協助）賦予了司法管轄權，並應當予以行使。

然而在HIH案件中，並無多數意見支持通過普通法司法管轄權命令移交。雖然若干國家具備與第426條類似的規定，或已經採納《示範法》而明確規定必須移交，但許多國家（包括香港）仍未這樣做，而需要依賴普通法管轄權。誠然，有來自其他國家的許多典據支持該管轄權，例如：Re Union Theatres Ltd (1933) 35 WALR 89；Re Air Express Foods Pty Ltd [1977] Qd R 107；Turners and Growers Exporters Ltd v The Ship 'Cornelis Verolme' [1997] 2 NZLR 110；Gavigan v Australasian Memory Pty Limited (1997) 8 NZCLC 261,449；Re National Benefit Assurance Company [1927] 3 DLR 289。然而，這些典據並不完全一致。假如已命令進行移交，通常會先行扣除開支和債權人的申索，在當地法例下該等申索是居於優先的。

結論

《示範法》提供了確定的框架，可以在此框架下通過快速、低成本的方式給予承認並提供協助。因此，它將受到歡迎。然而，我們亦不必誇大它的作用。除了爭執不休的移交問題，《示範法》所規定的許多內容，通過普通法亦可作出規定。此外，該法律將許多問題留給法院酌情處理，所採取的用語令人擔憂是否會因運用的體系不同而產生不同的結果。在跨境案件中行使酌處權很可能需要考慮相同的因素，無論是依照普通法還是《示範法》。《示範法》鼓勵跨境協助，但亦至少可聲稱法院可能已經做到這點。

最後，為了闡明一個國家在處理相同的問題時可能並存若干套條文，我們需要指出，除了普通法、第426條及《示範法》，英國還擁有（通過實施歐盟規定）《2002年歐洲破產程序規例》、《2004年保險人（重組與清盤）規例》及《2004年信貸機構（重組與清盤）規例》。本文無法探討它們的實質影響。然而應當指出：首先，假如應用上述條例，它們具有強制效力，並取代其他制度；其次，它們的影響範圍比《示範法》的條文更廣。

Peter Arden QC
Barrister, England and Wales
Enterprise Chambers