OverviewSince 2008, the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency (Model Law) has been in force in Australia pursuant to the Cross-Border Insolvency Act 2008 (Cth).
The purpose of the Model Law is to provide mechanisms to ensure that objectives such as cooperation between foreign courts, increased legal certainty for trade and investment and fair and efficient administration of cross-border insolvencies, are achieved in the conduct of cross-border insolvencies.
An important aspect of the Model Law is the provisions enabling a foreign representative such as an overseas liquidator, to apply to a court in a country such as Australia where the Model Law has been enacted, to obtain recognition by that court of a foreign insolvency law proceeding in which the foreign representative has been appointed or authorised to act. By obtaining recognition under the Model Law, a foreign representative can seek from the court a range of orders available under the Model Law to assist the representative in carrying out a cross-border reorganisation or liquidation of a corporation or individual debtor's assets.