UNITED NATIONS TRADE LAW COMMISSION CONCLUDES SESSION, ADOPTING MODEL LAW ON CROSS-BORDER INSOLVENCY

2 June 1997

Press Release
L/2831

UNITED NATIONS TRADE LAW COMMISSION CONCLUDES SESSION, ADOPTING MODEL LAW ON CROSS-BORDER INSOLVENCY

19970602 Also Began Work on Draft Legislative Guide For Privately Financed Infrastructure Projects

VIENNA, 30 May (UN Information Service) -- A set of internationally harmonized legislative provisions on cross-border insolvency, in the form of a model law, was adopted today by the United Nations Commission on International Trade Law (UNCITRAL) as it concluded its thirtieth session, which began on 12 May. The Model Law on Cross-Border Insolvency is intended to assist States to improve their national insolvency legislation, so as to cope with the growing number of bankruptcies involving enterprises and individuals which have assets in more than one country.

The increasing incidence of insolvencies with a cross-border nature reflects the continuing global extension of trade and investment. When a debtor with assets in more than one State becomes bankrupt, there is an urgent need for cross-border cooperation and coordination in supervising and administering the debtor's assets and affairs. Insufficient coordination may make fair and efficient bankruptcy and insolvency proceedings impossible, aid in the concealment of assets and reduce the chance of rescuing financially troubled but viable businesses.

With today's action, it is expected that the Commission will have offered States a model for a fair and modern national legislative framework to deal with cross-border insolvencies. It entrusted its Vienna-based secretariat to work out a guide for enactment of the model law that would help national legislators to incorporate its provisions into their national legislation without endangering their legal force.

Also during its current session, the Commission began substantive work towards drawing up legislative guidelines for privately financed infrastructure projects. The guide, as a more flexible tool than a model law, is intended to provide guidance to States preparing or modernizing legislation relevant to privately financed infrastructure projects.

The draft legislative guide is intended to enhance investor confidence by promoting legal certainty, while at the same time safeguarding the public interest, as the projects in question tend to involve public services such as

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roads or electric power supplies -- which were previously government-owned and financed. In preparation of the legislative guide, the secretariat is taking account of national laws and regulations pertaining to privately financed infrastructure projects, of various countries with differing legal traditions and at different levels of economic development.

During its three-week session, the Commission also continued its work on legal aspects of electronic commerce, including the questions of digital signatures and certification authorities. It also marked its thirtieth anniversary, observed at a special meeting on 26 May at the Palais Trautson and hosted by Austria's Minister of Justice, Nikolaus Michalek.

The United Nations Commission on International Trade Law brings together representatives of the world's geographic regions and principal economic and legal systems to work out international agreements and model laws designed to facilitate world trade by harmonizing international trade law. Over its 30-year history, the Commission has developed widely accepted texts that are viewed as landmarks in various fields of law. These include the United Nations Sales Convention, the UNCITRAL Model Law on International Commercial Arbitration, the UNCITRAL Arbitration Rules, and the recently adopted Model Law on Electronic Commerce.

Membership

The 36 members of the Commission are: Algeria, Argentina, Australia, Austria, Botswana, Brazil, Bulgaria, Cameroon, Chile, China, Ecuador, Egypt, Finland, France, Germany, Hungary, India, Iran, Italy, Japan, Kenya, Mexico, Nigeria, Poland, Russian Federation, Saudi Arabia, Singapore, Slovakia, Spain, Sudan, Thailand, Uganda, United Kingdom, United Republic of Tanzania, United States and Uruguay.

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