The Inherent Power of Common Law Courts to Provide Assistance in Cross‐Border Insolvencies: From Comity to Complexity

Abstract

The weighty and difficult issues associated with cross-border insolvency have generated considerable debate over the last two decades. Legislative reform has typically proven slow and fragmented. This article analyses the inherent power of common law courts to grant assistance in cross-border insolvency proceedings and the basis on which the inherent power is exercised. In doing so, it seeks to explore how the inherent power may continue to be of utility to common law courts. In particular, it considers the position in jurisdictions that are yet to adopt the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency or enact a substantial statutory regime for recognising and cooperating with foreign courts or representatives in insolvency proceedings. The article considers the benefits and disadvantages of continuing to recognise -and extend -the inherent power. It suggests that although there are fundamental differences concerning the exercise of the inherent power, it may be possible to agree on a number of principles that inform the application of the inherent power and its future development.

Cross‐border insolvency law in India: Are the principles of comity of courts and inherent common law jurisdiction relevant?

“…Common law jurisdictions have traditionally recognised an inherent power on the part of the courts to assist other courts or relevant parties during insolvency proceedings. 18 The power is exercised on the principle of the comity of courts which, although of historical origin, is of relevance even today. As the example of Hong Kong indicates, the power is particularly important when a jurisdiction does not have domestic legislation on cross-border insolvency.…”

Cross‐border insolvency law of China: An empirical analysis and proposal based on the insolvency cooperation mechanism between the Chinese mainland and Hong Kong

“…Unlike the Chinese Mainland, Hong Kong's legal system is characterized by common law, and its insolvency legislation is mainly stipulated in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, 22 while, in practice, Hong Kong courts mainly rely on judicial precedents to deal with insolvency proceedings with foreign-related elements. 23 Meanwhile, the Hong Kong SAR Government has established the Official Receiver's Office to conduct insolvency-related processing. Although there are no provisions in statutory law dealing with the treatment of cross-border insolvency of companies, the Hong Kong courts have long accumulated a relatively large body of judicial precedents on cross-border recognition and assistance.…”