It might be yours there but it’s not down here: Issues arising under the PPSA in cross-border transactions

As a relatively new piece of legislation, the Personal Property Securities Act 2009 (Cth) (PPSA) is yet to be the subject of much significant judicial consideration. Whilst the position of the Australian courts is becoming clearer in relation to domestic disputes, parties to cross-border transactions continue to encounter an alarming number of uncertainties with respect to the enforcement and maintenance of their security interests. This article considers the relevant problematic provisions of the PPSA and considers them in light of the authorities dealing with corresponding legislation in other jurisdictions. It then attempts to provide some guidance and suggestions as to the best means of protecting security interests in cross-border transactions.

Cross-border insolvency and legal transnationalisation

The last twenty years have seen an explosion of approaches for dealing with an inevitable consequence of globalised markets, that of cross-border insolvencies. This article places phenomena such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-border Insolvency and Cross-border Insolvency Agreements (also known as Protocols) within the context of developing laws on international commercial transactions. First it briefly describes the evolution of the international commercial law (sometimes known as the law merchant) to provide a context to understanding the international commercial responses to the problems created by cross-border insolvencies. Next, it outlines the range of approaches being adopted by States and multilateral bodies in recent decades to resolve cross-border insolvency issues. Finally it draws some preliminary conclusions on the potential implication of this transnationalisation process and broader international commercial law perspective, in particular on the capacity of Cross-Border Insolvency Agreements to address cross-border insolvency issues.

Cross-border insolvency

Panellist commentary on delivered conference papers on the topic of Cross-border Insolvency.

The emerging framework of cross-border insolvency in and around Australia : Saad Investments, Japan Airlines and Lehman Brothers – part one

Recent decades have witnessed a global acceleration of legislative and private sector initiatives to deal with Cross-Border insolvency. Legislative institutions include the various national implementations of the Model Law on Cross-Border Insolvency (Model Law) published by the United Nations Commission on International Trade (UNCITRAL).3 Private mechanisms include Cross-Border protocols developed and utilised by insolvency professionals and their advisers (often with the imprimatur of the judiciary), on both general and ad hoc bases. The Asia Pacific region has not escaped the effect of those developments, and the economic turmoil of the past few years has provided an early test for some of the emerging initiatives in that region. This two-part article explores the operation of those institutions through the medium of three recent cases.

The emerging framework of cross-border insolvency in and around Australia : Saad Investments, Japan Airlines and Lehman Brothers – Part Two

Recent decades have witnessed a global acceleration of legislative and private sector initiatives to deal with Cross-Border insolvency. Legislative institutions include the various national implementations of the Model Law on Cross-Border Insolvency (Model Law) published by the United Nations Commission on International Trade (UNCITRAL).3 Private mechanisms include Cross-Border protocols developed and utilised by insolvency professionals and their advisers (often with the imprimatur of the judiciary), on both general and ad hoc bases. The Asia Pacific region has not escaped the effect of those developments, and the economic turmoil of the past few years has provided an early test for some of the emerging initiatives in that region. This two-part article explores the operation of those institutions through the medium of three recent cases.

Cross-border malaria: a major obstacle for malaria elimination

Movement of malaria across international borders poses a major obstacle to achieving malaria elimination in the 34 countries that have committed to this goal. In border areas, malaria prevalence is often higher than in other areas due to lower access to health services, treatment-seeking behaviour of marginalised populations that typically inhabit border areas, difficulties in deploying prevention programs to hard-to-reach communities, often in difficult terrain, and constant movement of people across porous national boundaries. Malaria elimination in border areas will be challenging, and key to addressing the challenges is strengthening of surveillance activities for rapid identification of any importation or reintroduction of malaria. This could involve taking advantage of technological advances, such as spatial decision support systems, which can be deployed to assist program managers to carry out preventive and reactive measures, and mobile phone technology, which can be used to capture the movement of people in the border areas and likely sources of malaria importation. Additionally, joint collaboration in the prevention and control of cross-border malaria by neighbouring countries, and reinforcement of early diagnosis and prompt treatment are ways forward in addressing the problem of cross-border malaria.

The fisc and the frontier: Approaches to cross-border charity in Australia and the UK

The late twentieth century witnessed the transformation of the global economy beyond the fixed geographic boundaries of the nation-state system to one dominated by financial centers, global markets, and transnational firms. In the two decades to 2011, cross-border philanthropy from OECD Development Assistance Committee (DAC) donor countries to the developing world grew from approximately USD 5 billion to USD 32 billion (OECD, n.d.),[1] with some estimates for 2011 as high as USD 59 billion (Center for Global Prosperity, 2013). This is only part of cross-border philanthropy, which also includes remittances from migrant communities, social-media-enabled global fundraising, and medical research collaborations.

Cross-Border Insolvency Law

This new work provides a comprehensive and theoretically rich discussion of the law on cross-border insolvency. It engages with several current multi-billion dollar insolvencies such as those of Nortel Networks and Lehman Brothers to provide the reader with state of the art knowledge of the complex problems posed by transnational insolvency. As the number of transnational insolvencies grows due to prevailing economic conditions, practitioners are increasingly required to navigate the mass of legal rules applicable to cross-border insolvency situations. The associated challenges are heightened by the diversity of legal structures employed by modern business entities and a patchwork of costly, inefficient, and unpredictable national legal rules. The response has been a proliferation of international legal instruments such as the UNCITRAL Model Law and the the EU Insolvency Regulation, supplemented by judicial practice, adding further layers of complexity. Writing from an Australian perspective, the authors analyse this network of legal rules and subsequent case law. In addition, they explain the theoretical underpinnings of these rules in an accessible manner to build a solid foundation for practice, facilitate advanced reasoning, and enable the development of sophisticated arguments for law reform. Comparative case law from jurisdictions such as the United States and United Kingdom is also included. This book is highly relevant to insolvency practitioners faced with the recovery of assets located in different jurisdictions, transactional lawyers for whom knowledge of potential insolvency pitfalls is essential, and academics. It is invaluable for students at both undergraduate and postgraduate level seeking a sound understanding of this challenging area of law.

Recognition and enforcement in cross-border insolvency law: A proposal for judicial gap-filling

This Article analyzes the recognition and enforcement of cross-border insolvency judgments from the United States, United Kingdom, and Australia to determine whether the UNCITRAL Model Law’s goal of modified universalism is currently being practiced, and subjects the Model Law to analysis through the lens of international relations theories to elaborate a way forward. We posit that courts could use the express language of the Model Law text to confer recognition and enforcement of foreign insolvency judgments. The adoption of our proposal will reduce costs, maximize recovery for creditors, and ensure predictability for all parties.

The UNCITRAL Model Law on Cross-border Insolvency and its Potential Role in Upholding the Rule of Law

The rule of law is understood to be a core aspect in achieving a stable economy and an ordered society. Without the elements that are inherent in this principle the possibilities of anarchy, unfairness and uncertainty are amplified, which in turn can result in an economy with dramatic fluctuations. In this regard, commentators do not always agree that the rule of law is strictly adhered to in the international legal context. Therefore, this paper will explore one aspect of international regulation and consider whether the UNCITRAL Model Law on Cross-border Insolvency (1997) (‘Model Law’) and its associated Guide to Enactment and Interpretation (2013) contribute to the promotion of the key elements of the rule of law.

The inherent international tax regime and its constraints on Australia's sovereignty

Neither an international tax, nor an international taxing body exists. Rather, there are domestic taxing rules adopted by jurisdictions which, coupled with double tax treaties, apply to cross-border transactions and international taxation issues. International bodies such as the OECD and UN, which provide guidance on tax issues, often steer and supplement these domestic adoptions but have no binding international taxing powers. These pragmatic realities, together with the specific use of the word ‘regime’ within the tax community, lead many to argue that an international tax regime does not exist. However, an international tax regime should be defined no differently to any other area of international law and when we step outside the confines of tax law to consider the definition of a ‘regime’ within international relations it is possible to demonstrate that such a regime is very real. The first part of this article, by defining an international tax regime in a broader and more traditional context, also outlining both the tax policy and principles which frame that regime, reveals its existence. Once it is accepted that an international tax regime exists, it is possible to consider its adoption by jurisdictions and subsequent constraints it places on them. Using the proposed changes to transfer pricing laws as the impetus for assessing Australia’s adoption of the international tax regime, the constraints on sovereignty are assessed through a taxonomy of the level adoption. This reveals the subsequent constraints which flow from the broad acceptance of an international tax regime through to the specific adoption of technical detail. By undertaking this analysis, the second part of this article demonstrates that Australia has inherently adopted an international tax regime, with a move towards explicit adoption and a clear embedding of its principles within the domestic tax legislation.

Recognition and enforcement of foreign judgments : are the rules appropriate?

The recognition and enforcement of foreign judgments is an aspect of private international law, and concerns situations where a successful party to litigation seeks to rely on a judgment obtained in one court, in a court in another jurisdiction. The most common example where the recognition and enforcement of foreign judgments may arise is where a party who has obtained a favourable judgment in one state or country may seek to recognise and enforce the judgment in another state or country. This occurs because there is no sufficient asset in the state or country where the judgment was rendered to satisfy that judgment. As technological advancements in communications over vast geographical distances have improved exponentially in recent years, there has been an increase in cross-border transactions, as well as litigation arising from these transactions. As a result, the recognition and enforcement of foreign judgments is of increasing importance, since a party who has obtained a judgment in cross-border litigation may wish to recognise and enforce the judgment in another state or country, where the defendant’s assets may be located without having to re-litigate substantive issues that have already been resolved in another court. The purpose of the study is to examine whether the current state of laws for the recognition and enforcement of foreign judgments in Australia, the United States and the European Community are in line with modern-commercial needs. The study is conducted by weighing two competing objectives between the notion of finality of litigation, which encourages courts to recognise and enforce judgments foreign to them, on the one hand, and the adequacy of protection to safeguard the recognition and enforcement proceedings, so that there would be no injustice or unfairness if a foreign judgment is recognised and enforced, on the other. The findings of the study are as follows. In both Australia and the United States, there is a different approach concerning the recognition and enforcement of judgments rendered by courts interstate or in a foreign country. In order to maintain a single and integrated nation, there are constitutional and legislative requirements authorising courts to give conclusive effects to interstate judgments. In contrast, if the recognition and enforcement actions involve judgments rendered by a foreign country’s court, an Australian or a United States court will not recognise and enforce the foreign judgment unless the judgment has satisfied a number of requirements and does not fall under any of the exceptions to justify its non-recognition and non-enforcement. In the European Community, the Brussels I Regulation which governs the recognition and enforcement of judgments among European Union Member States has created a scheme, whereby there is only a minimal requirement that needs to be satisfied for the purposes of recognition and enforcement. Moreover, a judgment that is rendered by a Member State and based on any of the jurisdictional bases set forth in the Brussels I Regulation is entitled to be recognised and enforced in another Member State without further review of its underlying jurisdictional basis. However, there are concerns as to the adequacy of protection available under the Brussels I Regulation to safeguard the judgment-enforcing Member States, as well as those against whom recognition or enforcement is sought. This dissertation concludes by making two recommendations aimed at improving the means by which foreign judgments are recognised and enforced in the selected jurisdictions. The first is for the law in both Australia and the United States to undergo reform, including: adopting the real and substantial connection test as the new jurisdictional basis for the purposes of recognition and enforcement; liberalising the existing defences to safeguard the application of the real and substantial connection test; extending the application of the Foreign Judgments Act 1991 (Cth) in Australia to include at least its important trading partners; and implementing a federal statutory scheme in the United States to govern the recognition and enforcement of foreign judgments. The second recommendation is to introduce a convention on jurisdiction and the recognition and enforcement of foreign judgments. The convention will be a convention double, which provides uniform standards for the rules of jurisdiction a court in a contracting state must exercise when rendering a judgment and a set of provisions for the recognition and enforcement of resulting judgments.