Clifford Chance

The Model Law on Cross Border Insolvency (1997) promoted by United Nations Commission on International Trade Law (UNCITRAL) was adopted in Australia in 2008 in the form of the Cross-Border Insolvency Act 2008 (Cth). This extends Australian Courts' ability to recognise foreign insolvency proceedings and to provide assistance to foreign representatives in connection with foreign insolvency proceedings.

The Cross-Border Insolvency Act 2008 (Cth) provides that, where the Model Law applies, the court and the liquidator are obliged to cooperate “to the maximum extent possible” with foreign Courts and foreign representatives.

In addition to the Model Law, the court can also recognise foreign insolvency proceedings or provide assistance in corporate insolvencies pursuant to the Corporations Act 2001 (Cth), to the extent that the relevant proceedings fall outside the scope of the Model Law. The Corporations Act 2001 (Cth) provides that the courts must recognise insolvency procedures initiated in certain countries (including the United States, the United Kingdom, Malaysia, Singapore and New Zealand) whilst recognition of insolvency proceedings initiated outside of these countries remain at the discretion of the court.