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Blog 2015

2015-11-doc12 UK ratifies Cape Town Convention

The Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment entered into force in the United Kingdom on 1 November 2015. The Convention on International Interests in Mobile Equipment, concluded in Cape Town in 2001 (‘Cape Town Convention’) was a response to the unwelcome situation that interests in mobile equipment of high unit value regularly crossed national boundaries and were exposed to the risk and uncertainty created by differences in national laws governing security and related interests. The Convention provides an international legal regime for the creation, perfection and priority of security, title retention and leasing interests in ultra-expensive mobile assets (aircraft equipment, railway rolling stock and space assets). It is underpinned by an International Registry for each protocol covering a specific type of mobile equipment. The Convention entered into force on 1 March 2006. Besides the Convention, there are protocols on specific categories of equipment. Protocols have been adopted on Aircraft Equipment (2006), Railway Rolling Stock (2007), and Space Assets (2012). The Cape Town Convention is now in force in 68 contracting states. The great benefit fot the finance industry include the ability to register their security documents against the aircraft on the International Registry and also increased remedies on a default to assist with repossession of an aircraft. For the specific details of the Declaration that the UK has made, see http://www.jdsupra.com/legalnews/uk-ratification-of-the-cape-town-32142/. More on the Cape Town Convention, see p. 10 and onwards in the book announced yesterday, see http://bobwessels.nl/2015/11/2015-11-doc11-2nd-edition-of-cross-border-insolvency-law-international-instruments-and-commentary/    

2015-11-doc11 2nd edition of ‘Cross-border Insolvency Law, International Instruments and Commentary’

Recently, the second edition of ‘Cross-border Insolvency Law, International Instruments and Commentary’ (Bob Wessels & Gert-Jan Boon, eds.) was published. See http://www.wklawbusiness.com/store/products/cross-border-insolvency-law-international-instruments-commentary-second-prod-9041159878/hardcover-item-1-9041159878. The first edition (in 2007) has been regarded as ‘… an invaluable and quite unique reference text of international insolvency instruments and related texts…’ (Professor Paul Omar, Nottingham Law School), and ‘This book saves … cumbersome search for sources and offers an excellent entry to the core texts of international insolvency law’ (Dr. Andreas Geroldinger, associate professor University of Linz, Austria). Recent insolvency cases highlight the growing importance of cross-border insolvency matters in international transactions. In order to obtain relevant information essential for conduct in such transactions, an insolvency lawyer needs to have access to the many relevant instruments that have been introduced and implemented in recent years, but that until now have not been available in any single place. The book collects over fifty international and regional legal instruments relating to insolvency of companies as well as to corporate rescue law. The book includes international and regional (Asia, Africa, the Americas, Europe) conventions, model laws, regulations and directives, uniform rules and guiding principles produced by various international bodies (such as the World Bank, the United Nations Committee on International Trade Law, the American Law Institute, INSOL International, the European Bank for Reconstruction and Development, EBRD), and international and European restatements of insolvency law by scholars, including the most recent EU Cross-border Insolvency Court-to-Court Cooperation Principles. In addition the editors provide a over 130 pages insightful commentary covering, the key issues of each text, its latest amendments and revisions, and comparative analysis of the covered instruments.

2015-11-doc10 Max Planck Institute Luxembourg for Procedural Law

Last week I was in Luxembourg, where I have a post as (visiting) External Scientific Fellow of the Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law, see http://www.mpi.lu/the-institute/external-scientific-fellows/professor-bob-wessels/. Max Plank Institute Luxembourg for Procedural Law The Institute started in May 2013 and now has around 90 researchers and staff members and is led by prof. Burkhard Hess. The Institute's targeted growth is to have 65 staff and in the future overall up to 150 persons, to work at the Institute. International, European and Regulatory Procedural Law includes three areas of research: (i) dispute resolution under public international law, (ii) regulatory procedural law (in particular the currently insufficient regulation in the capital and financial markets), and (iii) European and comparative civil procedure law. This field addresses the whole range of judicial and extrajudicial settlement of civil law disputes, as well as dispute resolution. This department has a special focus on European civil procedure law, on the one hand on cross-border cases within the scope of application of Article 81 TFEU, on the other hand on the influences and requirements of the EU law vis-à-vis the national procedural laws. Another field of research in this department concerns the interfaces between the structure of the judiciary (especially questions related to institutional aspects and to professional law) and the settlement of disputes, for example the competing influence of private and state actors in the area of arbitration and (consumer) mediation. The Institute’s current research seamlessly aligns with my present and ongoing research, which includes the complex interaction between (near to) insolvent commercial debtors, appointed insolvency practitioners and advisors concerned and courts in national or cross-border rescues and insolvencies (which follows from my research for the European Law Institute’s project to draft a legislative guidance for Business rescue in insolvency in Europe) and the further development of rules and practice for cross-border coordination of insolvency cases by insolvency practitioners and courts, including the use of ‘protocols’, as a core tenet in the EU Insolvency Regulation (recast). Note that all researchers (from a range of backgrounds, such as Spain, Germany, Greece, Italy) are rather advanced, being post-docs or close to defending their PHD. With its excellent liabrary facilities and great service a welcome spot to do and discuss research. MPI Luxembourg is also open for individual guest, see http://www.mpi.lu/guest-program/.

2015-11-doc9 USA: dispute about Chapter 11 reform started.

In the USA the fight about Chapter 11 reform started indeed. In our article 'The Reform of Chapter 11: Its Process and the Recommendations Made', in: B. Wessels and R.J. de Weijs (Eds.), International Contribution to the Reform of Chapter 11 U.S. Bankruptcy Code. European and International Insolvency Law Studies 2, The Hague: Eleven International Publishing 2015, pp. 3-40, Rolef de Weijs and I (page 23) note that the Loan Syndications and Trading Association (LSTA) '... was - to say the least not pleased with the ABI Commissions' Report on the Reform of Chapter 11, see also http://bobwessels.nl/2015/10/2015-10-doc6-international-contributions-to-the-reform-of-chapter-11-u-s-bankruptcy-code/. The LSTA now has published a 80-pages report expressing their dissatisfaction. It is argued (i) that the ABI Report is based on the 'perception' that the system has failed, but that this perception is not supported by reliable empirical evidence. On the contrary, so the LSTA, the data that do exist generally support the conclusion that the system is functioning well, that (ii) the principal objective of current U.S. bankruptcy law is the maximization of value for all stakeholders and the principle of non-bankruptcy law regarding the distribution of that value, as reflected in bankruptcy’s 'absolute-priority' rule. Where the LSTA finds that the Commission's Report breaks from those principles (arguing that market changes have led to distributions of value in bankruptcy that are 'subjectively unfair') it denies that the existing clear, objective process that respects non-bankruptcy entitlements wherever possible ís fair, and that (iii) many of the changes proposed by the Commission would reduce recoveries by secured lenders in the event of default, which would necessarily result in the increased cost, and reduced supply, of secured credit. The LTSA also reviews several of the proposals made but concludes that these and other proposals would add cost and complexity to, and lengthen Chapter 11 cases. See for the LSTA report, http://www.lsta.org/uploads/DocumentModel/1860/file/lsta-abi-10615-final.pdf. Arguments (i) and (iii) are typical objections used by the key players with secured rights in many markets: no 'evidence' (as if first hand experience of some 200 experts from all over the country is outweighted by sheer numbers resulting from statistics the reliability might be criticised), and a 'warning' that the proposals will make providing finance more difficult and costly. The heart of the criticism seems to be the challenge to find a balance between the existing 'maximization' of value (in the narrow sense of 'money') and the tendency to take into account also other interests as well, such as continuation of business (and therefore continuation of jobs ánd payments to the taxman). The debate in Europe is rather similar and its outcome can only be achieved by further debate.

2015-11-doc8 Guide to Good Practices in Civil Judicial Expertise in the European Union

The European Expertise and Expert Institute (EEEI) recently issued its Guide to Good Practices in Civil Judicial Expertise in the European Union. The Guide aims to improve judicial procedures and to ensure that citizens and companies increase their trust in justice, whether it be in their own Member States or when they are living or working in a host country and have to deal with cross-border issues. In some 10 years, with a large group of interested stakeholders, exisiting systems with heterogeneous realities of judicial expertise and judicial experts were studied. The Guide's key topics are the appointment of the expert, the expertise procedure, his/her report, renumeration, status and the suggestion to establish a list of European Experts. A proposal for a Code of Ethics of European Judicial Experts (with 40 articles) is included in an Annex to the Guide. EEEI believes that the Guide to Good Practices in Civil Judicial Expertise in the European Union is the result of work led by European professionals whose main aim is to improve and harmonize very different practices, based on a will to determine a strong, democratic, European model, at the service of the citizens and companies of the European Union. 2015_11_04_eeei_guide_to_good_pratices_egle_en