On May 17, 2018, within the International Insolvency Forum International and Comparative Law Research Center held a roundtable on the topic of Prospects for cross-border insolvency regulation in the EAEU: how to open the boundaries for the foreign insolvencies and not to become affected by regulatory competition and forum shopping?
The most optimal solution of cross-border insolvencies regulation for the Member States of the EAEU was discussed within the session.
Under the integration within the EAEU the economies of the Member States become more and more unified. In this situation, when insolvency procedure extends beyond the borders of one single state, the new challenge appears – the creation of the instruments for cross-border insolvency regulation. Under what circumstances the foreign entities become the subject of insolvency procedure? How should we recognize the foreign insolvency proceedings? How to avoid cross-border transactions, how to pierce the corporate veil and make foreign controlling entities subsidiary liable etc.?
Indeed, the pattern of insolvency laws of the EAEU Member States is diversified. For instance, under the Kazakh laws, the variety of rehabilitation procedures is set up. In the Kyrgyz Republic, the institution of non-curial insolvency is envisaged, under which the judiciary functions are exercised by the creditors’ committee. Priority rules, secured creditors rights, the transactions avoidance rules, the right for set-off and etc. differ significantly in EAEU Member States.
Consequently, the following question gets important: which risks and opportunities do businesses have under cross-border insolvency within the EAEU? Are there prospects for the forthcoming migration of debtors to the Member States, where the certain rehabilitation procedures are widely applied? Shall the creditors’ rush to the most loyal “creditor-friendly” regimes be foreseen instigated by the great volume of legal tools designed to challenge transactions and make the controlling entities of the debtor liable?
The other point of issue refers to the appreciation of states’ approach: how shall the Member States of the EAEU respond to the evolving “insolvency markets” and shall the Member States compete in order to elaborate the “best” insolvency laws? How can the states limit the forum shopping and the options to choose the most beneficial jurisdiction for the purpose of insolvency? How can the cross-border effect of insolvency be guaranteed? How to open borders to foreign bankruptcies and not to be affected by regulatory competition and unfair forum shopping?
The photos are available on the Forum's website.
