Insolvency Proceedings: ASEAN and EU Comparison on the Rules of Foreign Court Jurisdiction

Abstract

Due to a lack of uniformity or harmonization of laws and regulations, cross-border insolvency has remained an issue in the ASEAN region. ASEAN economic openness with the implementation of the ASEAN Free Trade Area (AFTA) and ASEAN Economic Community (AEC) may create issues at some points as investors compete to dominate the ASEAN while assets are located not only on their own territory but also in other ASEAN member countries. On some occasions, they can fail to meet their debt payment obligations when performing international business transactions. As a result of the bankruptcy case, a legal arrangement may exist between the country in which the business actor is declared bankrupt and the country in which the bankrupt debtor's assets are located. This interaction between two or more countries involves a clash of jurisdictions. In order to counter such an issue, ASEAN may learn from what the EU has done over these decades. The study aims to compare the regulatory issue of foreign court jurisdiction in settling the insolvency cases both in ASEAN and EU. The paper is normative-qualitative legal research. It used a comparative, statute, and conceptual approach. It is found that in terms of cross-border insolvency, the European Union is far ahead of ASEAN, given that at least two major regulations in place, namely EC Regulation 1346/2000 and EU Regulation 2015/848, while ASEAN has almost nothing to offer at this time. The experience of the EU to formulate and implement a settled regulation on foreign court jurisdiction in settling the insolvency cases among EU member countries is one of the valuable lessons that ASEAN may take from the EU.

Reformation of Indonesian Insolvency Regulation on Execution of Cross-Border Assets Based on the European Union

“…ASEAN is a regional economic and political cooperation formed in August 1967 (Ishikawa, 2021), currently comprising 10 countries, namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. At present, cross-border insolvency is also a cause for concern within ASEAN as law enforcement still lacks consistency and coordination (Anggriawan, 2020).…”

“…In terms of cross-border insolvency regulation, one that is deemed successful and is ahead of Indonesia is the Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings (recast) ("EU Regulation") (Anggriawan, 2020). This regulation was formulated and implemented by the European Union, a supranational union consisting of 27 member states in Europe (Wallace et al, 2020) created for unity amongst its members (Wiener et al, 2019).…”

Cooperatives as Entities Influencing the Sustainable Development of Rural Areas in European Union

“…These entities are often very important, stable employers, and when agricultural producers are members of a cooperative this leads to an increase in their income. At the same time, by participating in the implementation of broadly understood public and social goals, such as the development of investment, human capital, environmental protection, and renewable energy, they contribute to the economic and social development of the region in various ways (Anggriawan, 2020). Cooperatives often take part in programs and activities which help promote the area in which they operate (Bijman, 2012, 2-56).…”

International Jurisdiction of the Indonesian Court in Private International Law Litigation

“…By taking a comparative approach to the applicable regulation in the European Union, [23] which recognizes forum laboris in the Brussels Regulation, the European Court of Justice ruled that if the employee carries out his work in several places, each of which is within the jurisdiction of a different court, then the court with the most appropriate jurisdiction must be determined. The European Court of Justice provides some criteria to determine the employee's habitual workplace and the most competent court under the forum laboris principle [25]:…”