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I. PURPOSE OF THE MODEL LAW





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1. The UNCITRAL Model Law on Cross-Border Insolvency, adopted in 1997 by the United Nations Commission on International Trade Law (UNCITRAL), is designed to assist States to equip their insolvency laws with a modern, harmonized and fair framework to address more effectively and efficiently instances of cross-border insolvency.

2. The instances of cross-border insolvency to which the Model Law applies are those where the insolvent debtor has assets in more than one State or where some of the creditors of the debtor are from a State other than the State where the insolvency proceeding is taking place.

3. The Model Law respects the differences among national procedural laws and does not attempt a substantive unification of insolvency law. It offers solutions that help in several modest, but nonetheless significant ways. With its scope limited to some procedural aspects of cross-border insolvency cases, the Model Law is intended to operate as an integral part of the existing insolvency law in the enacting State.

4. By enacting the Model Law, the State would:

· provide access for the person administering a foreign insolvency proceeding ("foreign representative") to the courts of the enacting State, thereby permitting the foreign representative to seek a temporary "breathing space," and allowing the courts in the enacting State to determine what coordination among the jurisdictions or other relief is warranted for optimal disposition of the insolvency;

· determine when a foreign insolvency proceeding should be accorded "recognition," and what the consequences of recognition may be;

· provide a transparent regime for the right of foreign creditors to commence, or participate in, an insolvency proceeding in the enacting State;

· permit courts in the enacting State to cooperate more effectively with foreign courts and foreign representatives involved in an insolvency matter;

· authorize courts in the enacting State and persons administering insolvency proceedings in the enacting State to seek assistance abroad;

· provide for court jurisdiction and establish rules for coordination where an insolvency proceeding in the enacting State is taking place concurrently with an insolvency proceeding in a foreign State;

· establish rules for coordination of relief granted in favour of two or more insolvency proceedings that take place in foreign States regarding the same debtor.

5. Together with the Model Law, the Secretariat of the Commission has published a Guide to Enactment so as to assist legislators in preparing national legislative revisions and to provide insight to other users of the text, such as judges and insolvency practitioners.

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