BUSINESS lawyers are hoping to encourage an international ruling on insolvency proceedings through the introduction of an agreed set of multi-jurisdictional guidelines.
The agreement, drawn up by 20 countries across the world, recommends uniformity in rules covering cross-border proceedings.
Prepared last month by lawyers of the International Bar Association, it provides a framework for harmonising insolvency issues in both civil and common law jurisdictions around the world.
At present, nations dealing with policy and commercial problems have not adopted a uniform statute or treaty to cover insolvency matters, but it is hoped the guidelines will encourage a more formal ruling on the subject.
Canadian lawyer Bruce Leonard, co-chair of the IBA's committee on insolvency and creditors rights, said the agreement came about after years of failed work on bankruptcy and insolvency treaties.
“There have been negotiations towards a European treaty that have been going on in one form or another for 25 years,” said Leonard.
“There are also examples of other treaties where preliminary steps were taken but never finalised. As a consequence, there are very few international treaties between countries in the bankruptcy area.”
The guidelines have been compiled by representatives from continental Europe, the Pacific Rim, North and South America, and Great Britain and the British Commonwealth, as well as senior commercial lawyers and leading judges.
Leonard said the agreement would offer courts a guide for consideration when dealing with international reorganisations and insolvencies.
An earlier version, published in the US, has already been referred to by a New York court, and Leonard said he was confident similar judicial approval would follow in other areas.
The agreement has already received the approval of the IBA's section on business law, and the preliminary support of the association's full council.
Formal approval of the framework is expected to be granted at the next council meeting in Madrid next June.
“This concordat is not set in stone,” said Leonard. “We intend to monitor its progress and its acceptability in the courts and to adapt and improve it as we gain experience.”