| dbo:abstract
|
- Modified universalism or modified universality is a legal concept (particularly an English legal concept) relating to the general principle that in relation to corporate insolvency national courts should strive to administer the estate of insolvent companies in the spirit of international comity. The broad concept is that it is desirable for cross-border insolvencies to be managed by a single officeholder as a single estate rather than a series of piecemeal and unconnected proceedings in different countries, and that this should be recognised globally. In practice, whilst many countries will recognise foreign bankruptcy proceedings, in many instances the courts have set some limits on the recognition of insolvency proceedings, such that the courts apply this principle of modified universality whereby the courts retain a discretion to assess whether the overseas proceedings are consistent with their own principles of justice and public policy. But, subject to that safeguard, the courts will generally defer to the proceedings which are regarded as the "main proceedings" for the purposes of getting in and distributing assets of the insolvent company. The principal is referred as to modified universalism in that it strives to find a balance between purely territorial bankruptcy systems, and entirely universal international bankruptcy system. Credit for the invention of the modern term is usually given to Professor Jay Westbrook. The concept of modified universalism broadly underpins the UNCITRAL Model Law on Cross-Border Insolvency, and the EC Insolvency Regulation on Insolvency Proceedings (Council Regulation (EC) No 1346/2000). Similarly, Chapter 15 of the US Bankruptcy Code (which is based upon the UNCITRAL Model Law) is heavily predicated on the concept of modified universalism. [T]he United States in ancillary bankruptcy cases has embraced an approach to international insolvency which is a modified form of universalism accepting the central premise of universalism, that is, that assets should be collected and distributed on a worldwide basis, but reserving to local courts discretion to evaluate the fairness of home country procedures and to protect the interests of local creditors. The concepts of universalism and modified universalism have, predictably, shifted and evolved over time. In English law the concept of universalism is usually used in contrast to the alternative theory of judicial cooperation in cross-border insolvencies referred to as the doctrine of unity. As has been judicially noted: "The meaning of the expression 'universalism' has undergone a change since the time it was first used in the 19th century, and it later came to be contrasted with the 'doctrine of unity.' In 1834 Story referred to the theory that assignments under bankrupt or insolvent laws were, and ought to be, of universal operation to transfer movable property, in whatever country it might be situate, and concluded that there was great wisdom in adopting the rule that an assignment in bankruptcy should operate as a complete and valid transfer of all his movable property abroad, as well as at home, and for a country to prefer an attaching domestic creditor to a foreign assignee or to foreign creditors could 'hardly be deemed consistent with the general comity of nations ... [T]he true rule is, to follow out the lead of the general principle that makes the law of the owner's domicil conclusive upon the disposition of his personal property,' citing Solomons v Ross as supporting that doctrine: Story, Commentaries on the Conflict of Laws, 1st ed (1834), pp 340-341, para 406." (en)
|
