2026 Fletcher Moot

International insolvency law governs how the assets, debts, and restructuring proceedings of financially distressed debtors are handled when those debtors, their creditors, or their property span multiple jurisdictions. Historically, states approached cross-border insolvency through one of two competing philosophies: 'territorialism,' under which each state administers assets within its borders under its own law, and 'universalism,' under which a single 'home' proceeding governs the debtor's worldwide estate with cooperation from other forums. Throughout the twentieth century, territorialism dominated in practice, producing duplicative proceedings, asset races by creditors, and unpredictable outcomes — problems that grew acute as multinational corporate groups, complex secured financing, and cross-border supply chains expanded. From the 1990s onward, international institutions pushed toward 'modified universalism,' under which courts recognize and cooperate with a foreign main proceeding while preserving certain local protections. The 1997 UNCITRAL Model Law on Cross-Border Insolvency, the EU Insolvency Regulation (2000, recast in 2015), the World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes, and the UNCITRAL Legislative Guide on Insolvency Law collectively built a soft-law framework around recognition of foreign proceedings, judicial cooperation, and minimum substantive standards for reorganization and liquidation. High-profile cross-border cases — Maxwell Communication, BCCI, Lehman Brothers, Nortel, and more recently restructurings of shipping, energy, and crypto-finance groups — have stress-tested these mechanisms. Today the field faces several open fronts: divergent treatment of restructuring plans imposed on dissenting creditors (so-called 'cram-down' and the rise of UK schemes, restructuring plans, and US Chapter 11 as global fora); the use of forum shopping and 'COMI shifting' to access favorable regimes; the insolvency of state-owned enterprises and sovereign-linked debtors; the treatment of digital assets and decentralized entities; and the absence of a binding multilateral convention. Debate centers on whether to deepen harmonization through treaty law or continue relying on incremental model-law adoption.

The UNCITRAL Model Law on Cross-Border Insolvency was adopted by the UN Commission on International Trade Law in 1997 in response to the proliferation of multinational insolvencies that overwhelmed traditional, territorial approaches to bankruptcy. Drafted by UNCITRAL Working Group V with input from INSOL International and the International Bar Association, the Model Law deliberately avoided harmonizing substantive insolvency law. Instead, it created a procedural framework built on four pillars: access for foreign representatives to local courts, recognition of foreign proceedings as either 'main' (where the debtor has its centre of main interests, or COMI) or 'non-main,' relief and stays following recognition, and cooperation and coordination among courts and insolvency practitioners. Adoption has been uneven but growing: roughly sixty jurisdictions have enacted the Model Law or close variants, including the United States (Chapter 15, 2005), the United Kingdom (Cross-Border Insolvency Regulations 2006), Japan, Singapore, Australia, Canada, South Africa, Mexico, and several Gulf and African states. Case law has clarified — and sometimes complicated — core concepts. Courts have debated how to identify COMI, when to recognize proceedings opened in 'letterbox' jurisdictions, the limits of relief available post-recognition (notably whether foreign restructuring plans discharging local-law debt can be enforced, as in the UK's Rubin v. Eurofinance and the US Jevic line of cases), and how to handle proceedings from non-Model-Law states. Current debate focuses on three issues. First, the 2018 Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ) was developed to fill the Rubin gap but has been adopted by very few states. Second, civil-law jurisdictions in continental Europe, Latin America, and parts of Asia have been slower to enact, citing tensions with domestic priority rules and public policy. Third, geopolitical fragmentation — sanctions regimes, capital controls, and asset freezes — increasingly intrudes on what was designed as a technical, cooperative instrument.

The UNCITRAL Model Law on Enterprise Group Insolvency (MLEG) was adopted in 2019 to address a gap left by the 1997 Cross-Border Insolvency Model Law: while the earlier instrument focused on coordinating proceedings of a single debtor across jurisdictions, modern business failures typically involve corporate groups composed of dozens or hundreds of legal entities incorporated in different states, with intertwined financing, guarantees, and operations. Cases such as Lehman Brothers, Nortel Networks, and Sears Holdings demonstrated that piecemeal, entity-by-entity insolvencies could destroy going-concern value, produce inconsistent restructuring outcomes, and trigger years of litigation over inter-company claims and asset allocation. MLEG, developed by UNCITRAL Working Group V and accompanied by an extensive Guide to Enactment, introduces several novel mechanisms. It contemplates a 'planning proceeding' opened in the jurisdiction of a key group member (typically the parent or principal operating company), through which a 'group insolvency solution' covering multiple group members can be developed and presented for recognition and implementation in other jurisdictions. It encourages the appointment of a 'group representative,' authorizes direct court-to-court and practitioner cooperation, and provides tools for participation of group members not formally in insolvency proceedings. It also includes safeguards: local creditors' interests, public policy exceptions, and the ability of enacting states to limit relief. Adoption is still in its early stages. As of the mid-2020s only a handful of jurisdictions have enacted MLEG, with the United States, the United Kingdom, and Singapore among the most active in evaluating or implementing it. Key debates include how MLEG interacts with the 1997 Model Law and the 2018 Judgments Model Law; whether centralizing a group solution in one forum amounts to de facto substantive consolidation that prejudices local stakeholders; how to treat state-owned enterprise groups and financial conglomerates already subject to specialized resolution regimes; and whether the soft-law model-law approach can keep pace with increasingly complex multinational group structures.