An Introduction to International Insolvency

Mar 11, 2020

International insolvency regulates the treatment of financially distressed debtors where such debtors have assets and liabilities in more than one country.  Usually, international insolvency has more to do with the insolvency of companies that operate in more than one country rather than the personal bankruptcy of individuals.

With globalisation on the increase, the obstacles to international investment and business continue to be removed. The inherent risks and complications, however, of carrying out international business remain. As a result, insolvency practitioners in England and Wales are increasingly having to deal with the recovery and realisation of assets situated overseas as well as claims by foreign entities to the assets of an insolvent company or individual in England and Wales.

Many of the companies that enter insolvency every day have some cross-border element and many involve offshore jurisdictions.  As a result of the growth in cross-border insolvency, there has been a corresponding increase in the various sources of law to resolve the legal issues.

In deciding on the appropriate law and jurisdiction, one of the first things to do is to consider the nature of the dispute to see if it relates to a matter that has arisen in management of the insolvency, for example a decision of the appointment taker/officeholder, or in the context of the recovery or realization of an asset.

To avoid the risk of having scores of lawyers in different countries untangling cross-border issues and increasing insolvency costs to the detriment of creditors, in England and Wales the EC Council Regulation 1346/2000 of 29 May 2000 on insolvency proceedings, known as the EC Insolvency Regulation and the 1997 United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency have been enacted.

The general principle under Article 4 of the Insolvency Regulation is that the governing law is that of the country within which the insolvency proceedings are opened.

If the European Insolvency Regulation cannot be used, then  the UNCITRAL Model Law may assist. The countries who are members of the Model Law can use the Model Law to obtain judicial recognition of a foreign insolvency process, although it is necessary to look at the enabling legislation of the member and also the terms of the Model Law enacted in the foreign member’s jurisdiction.

National insolvency regimes often have very different approaches to key issues, for example in relation to the treatment of secured creditors, rights of set-off and corporate rehabilitation regimes. Our team has dealt with and negotiated the challenges of multi-jurisdictional insolvency, often cooperating with insolvency officials and other interested parties overseas, in order to provide clients with a coherent strategy and a creative solution that suits their needs.

The Supreme Court’s decision in Rubin v Eurofinance 2012 reversed an earlier trend towards international judicial co-operation by the English courts in international insolvency.  In this case, the Supreme by a majority of 4:1 ruled that avoidance claims in insolvency proceedings should not be treated any differently to any other type of court judgments such as to recover a debt or for damages for breach of contract.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.

If you would like to know more about International or Cross- Border Insolvency, contact Adrian Taylor on 01276 854 922 or adrian.taylor@herrington-carmichael.co.uk 














Adrian Taylor

Adrian Taylor

Partner, Head of Disputes and Claims


Latest Articles & Legal Insights

Commercial Lease Break Notices and Pitfalls for Tenants

Commercial Lease Break Notices and Pitfalls for Tenants

This podcast will be looking at the practical difficulties caused by COVID emergency restrictions in using the Court process to remove tenants from rented property, as well as discussing the key questions Landlords should be asking themselves now that some of those restrictions are being lifted.

Residential Landlords and COVID

Residential Landlords and COVID

This podcast will be looking at the practical difficulties caused by COVID emergency restrictions in using the Court process to remove tenants from rented property, as well as discussing the key questions Landlords should be asking themselves now that some of those restrictions are being lifted.

Sign up

Enter your email address for legal updates on Private Client & Family Law.

Please see our privacy policy regarding use of your data.

Top read insights in 2019

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Purchasing Land – Option Agreements

A developer and a landowner can enter into an Option Agreement. What are the strategies that can be employed by both landowners and developers to assist in such land deals?

Divorce and Family Law

What are the Tax Implications of a Civil Partnership?

Is there a significant tax saving to be made by a couple who are married or in a civil partnership that cohabitating couples simply don’t qualify for?  

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Is my Will applicable to my Spanish property?

You must be careful when relying on an English Will in relation to your Spanish property.

Award winning legal advice

We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2020 by Legal 500 and Alistair McArthur is ranked in Chambers 2020.


60 St Martins Lane, Covent Garden, London WC2N 4JS 

+44 (0) 203 755 0557



Building 2  Watchmoor Park, Riverside Way, Camberley, Surrey  GU15 3YL

+44 (0)1276 686 222


Wokingham (Appointment only)

4 The Courtyard, Denmark Street, Wokingham, Berkshire RG40 2AZ

+44 (0)118 977 4045


© 2020 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority.

Privacy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies   |   Client Feedback