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The ever-growing proliferation of international trade and the rise of increasingly large transnational corporations means that whenever the next big downturn overtakes us, there will be an unprecedented level of transnational insolvency proceedings. This, in turn, will likely result in a number of unprecedented legal issues that will need to be resolved through a patchwork of overlapping (and potentially contradicting) international treaties, country-specific laws, and established practices relating to international law.

China’s market-oriented reform has generally been successful since it started in the late 1970s. However, the transition of its corporate and financial sectors has suffered greatly from the absence of a functioning insolvency regime. While a trial bankruptcy law was adopted in 1986 and took effect in 1988, it covered only state-owned enterprises (SOEs), which now account for only about one third of the country’s total output. Non-state-owned enterprises have been left to a set of simple insolvency rules of the Civil Procedure.

On Aug. 27, 2006, the People’s Republic of China passed a new bankruptcy law that will become effective on June 1, 2007. The concept of bankruptcy law is not new in Chinese law. The first bankruptcy law, called the “Qing Law,” dates from 1906, near the end of Qing dynasty. Before that, the issue was governed by an ethical precept, according to which “the debts of the father are to be paid by the son.” But the Qing Law had a short duration and was abolished with the fall of the empire around 1912.

As a general matter, the attorney-client privilege is perceived as an almost bullet-proof wall against disclosure of client communications. This perception rests largely on the often unstated assumption that the corporate entity will continue to operate as a going-concern and desires to maintain the confidentiality of its communications. Bankruptcy, however, fundamentally alters that assumption.

Not only has the last year been marked by a new Canadian government under the leadership of conservative Prime Minister Stephen Harper, it has also brought about significant revisions to Canada’s federal insolvency statutes.

In the fall of 2003, the Canadian Senate’s Banking, Trade and Commerce Committee completed its five-year review of insolvency legislation and delivered a detailed series of recommendations for reform. Many of the proposed recommendations were incorporated into Bill C-55, which was tabled in the Canadian House of Commons in June 2005.

One of the most polemic, intricate, worst and largest cases of corporate distress in Brazilian history, the Varig Airlines case came to an end last week. The first case resolved under Brazil’s new bankruptcy law has left numerous lessons for its stakeholders as well as billions of dollars of destruction in its wake. It also leaves many questions regarding (i) acts of management and decision-making, (ii) the question of substance vs. form, (iii) concrete effects and results, and (iv) responsibilities.

Report on the One-Day Workshop on ADR and Panel Presentation on the Efficacy of ADR as a Tool to Resolve Financial Disputes in ASEAN Member Countries Conducted During the 2nd Annual ASEAN Legal Forum, Bangkok, Thailand, July 26-28, 2005

The Singapore Mediation Centre (SMC) is a nonprofit organisation established in 1997 to provide commercial mediation services. It is structured as a company limited by guarantee of the Singapore Academy of Law (SAL). The SMC was launched by the Honourable Chief Justice Yong Pung How on 16 August 1997.

Cross-border insolvencies are perhaps one of the numerous consequences of the increased globalization of and recent downturns in the economy.

As we all know there is no comprehensive international law on insolvency although numerous trends and efforts push towards building adequate legal frameworks to deal with certain effects entailed by the financial distress of multinational companies: among those, the UNCITRAL model and the recent EC Regulation n° 1346 of May 2002.

Can a court ordered stay of proceedings under the Canadian restructuring statute, the Companies’ Creditors Arrangement Act (the “CCAA”) apply to a contract for the supply of natural gas? This depends in part on whether the contracts fall within the definition of “eligible financial contracts” under the CCAA, and, in part, on the terms of the contracts.

What constitutes an eligible financial contract for the purposes of §11.1 of the CCAA was recently reconsidered in insolvency proceedings in respect of Androscoggin Energy LLC.