(Public Prosecutor emeritus, Supreme Court (Belgium); Honorary Advocate General, Benelux Court; emeritus Professor of Civil Procedure at the Vrije Universiteit Brussel (VUB); President of the Belgian Institute of Comparative Law; Honorary Royal Commissioner for judicial reform; member of the Koninklijke Academie van België voor Wetenschappen, Letteren en Schone Kunsten; Chairman of the working group set up by the Belgian Minister of Justice to draft the new law on insolvency proceedings which has just been approved by the Belgian Parliament.)

The recognition and enforcement of foreign judgments in insolvency proceedings raises complex questions: the divestment and liquidation of debtors’ assets, the protection of creditors, the applicability of binding national rules in respect of preferential claims and liens and security interests, and so forth. It was this very complexity which caused the issue of insolvency to be excluded from the scope of the 1968 Brussels Convention.

 Over the past decade, however, no fewer than three pieces of international legislation have appeared on the scene: the Council of Europe’s 1990 European Convention on Certain International Aspects of Bankruptcy, the 1995 convention of the European Union on Insolvency Proceedings, and the 1997 UNCITRAL Model Law on Cross-Border Insolvency. In this paper, the author examines the broad trends evidenced in these three instruments in the matter of insolvency and bankruptcy

. Whereas the recognition of a decision to open bankruptcy proceedings rendered in another Contracting State is automatic (hence not requiring exequatur) where the two Conventions are concerned, the Model Law on the other hand does lay down procedural requirements since there is no reciprocity. The instruments have many points in common, such as the reservation on public policy in the enforcing State and the exclusion of certain categories of debtors. As to the effects of recognition, the author examines the different angles in turn: divestment of the debtor, powers of the liquidator, rights and duties of creditors, realisation of assets, highlighting the unique features of each instrument.

 The system set in place by the international instruments is based on the principle of indivisibility of bankruptcy, according to which all the debtor’s assets, wherever they might be located, are liquidated and the proceeds divided up amongst the creditors, either in the State where the proceedings were opened or in another State. However, all three texts make provision for the contingency of insolvency proceedings commencing in another State (i.e. secondary as opposed to main proceedings) and permit the co-existence of simultaneous proceedings, submitting the debtor’s assets in their entirety to the same rules in respect of liquidation and distribution of claims. While welcoming the considerable effort made to reconcile positions in this extremely sensitive area, the author nevertheless stresses the limitations of the resulting compromise, on account of the numerous preferential and priority arrangements which guarantee the rights of certain categories of creditors at the national level.

 International co-operation (between the judicial authorities and the liquidators) is vital, particularly as regards the effects of international insolvency proceedings. All three texts address this issue, but the UNCITRAL Model Law offers the most detailed provisions. Finally, the author examines the mechanisms instituted under the Convention of the European Union to ensure its uniform interpretation, with powers vested in the European Court of Justice to issue preliminary rulings at the request of State jurisdictions authorised to do so, or to give rulings on interpretation a posteriori, thus laying the foundations for genuine judicial co-operation.

 These recent efforts to unify the international rules on insolvency represent a real step forward. It is a great pity therefore that neither of the Conventions is in force, for lack of political will on the part of Governments.