When does UNCITRAL (implemented by the Cross-Border Insolvency Regulations) apply and what are the effects?


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Restructuring & Insolvency expert
Practice notes

When does UNCITRAL (implemented by the Cross-Border Insolvency Regulations) apply and what are the effects?


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Restructuring & Insolvency expert

Practice notes
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UNCITRAL Model Laws on Insolvency

The UNCITRAL Model Law on cross-border insolvency (the UNCITRAL Model Law on Insolvency) was formally approved by the UN Commission on International Trade Law (the Commission) in 1997. Countries are free to enact it either in full or in part, with or without modifications, so it is essential to look at the relevant enacting legislation in each country in detail. It doesn't have automatic effect but needs specific enacting legislation in each country. England adopted it by enacting the CBIR 2006 with effect from 4 April 2006, making some modifications to the text of the UNCITRAL Model Law on Insolvency. The US has adopted it by enacting chapter 15 of the US Bankruptcy Code (see Practice Notes: Recognition of foreign insolvency proceedings in the US under chapter 15 and List of countries which have adopted the UNCITRAL Model Law on insolvency or are considering its adoption).

Note that the Insolvency (Amendment) (EU Exit) Regulations 2019, SI 2019/146 have amended both the Regulation

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

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