On April 6, 2017 City, University of London proudly hosted the “Inaugural Cross-Border Corporate Insolvency and Commercial Law [CI&CL] Research Group Conference & Symposium”. This full day event, sponsored by Thomson Reuters and promoted by INSOL Europe and INSOL International, saw the contributions from more than 70 people. Thanks to its success and the positive feedback from the audience, Prof. Jason Chuah, head of the Academic Department at City, University of London, confirmed that the university will continue to support the activity of the research group alongside the organization of an insolvency conference. Similar conferences are therefore due to take place on an annual basis at the City, University of London premises.
The programme covered a broad area of insolvency-related topics. After a light breakfast, Dr. Julia Constantino Chagas Lessa (City, University of London) and Dr. David Burdette (INSOL International) chaired the first two sessions reserved for doctoral candidates and early career academics. The proposed papers covered a wide range of substantive issues. They also evidenced a tendency in PhD studies to focus on comparative and empirical research, with emphasis placed on the analysis of legal changes and hurdles in developing and emerging countries.
The programme continued with a lecture given by Prof. Andrew Keay (Centre for Business Law and Practice at the University of Leeds) on the prospects and obstacles of harmonizing avoidance rules in European Union insolvencies. In his speech, Professor Keay drew on the evidence collected during a research project coordinated by his university, and funded by the European Union, aimed at mapping and comparing Member States’ insolvency legislation on a wide variety of matters.
With specific reference to avoidance rules, Professor Keay highlighted the most significant differences currently existing between national laws. In his paper, he considered the factors that ought to be addressed to formulate a harmonized scheme for avoidance rules in insolvency. The critical assumption behind his thinking is that, while harmonization is a commendable goal, how it is done, and what must be taken into account are issues of equal gravity.
In line with the concerns raised by the lecture, some of the papers critically analysed the progress achieved by the Member States in reforming their national statutes on the basis of recommendations and proposals issued by the European Commission. Participants learnt of the initiatives and preliminary reforms undertaken in countries such as Italy, Germany and the United Kingdom. They could also appreciate how, despite the EC‘s efforts, insolvency rules and statutes continue to remain fragmented. Speakers generally argued that national policy makers felt the duty to consider EU (non-binding) proposals against a wide variety of business and legal cultures, thus falling short of the European harmonization goal.
The recent decision of the UK government to trigger the negotiations for leaving the European Union, following the results of the 2016 referendum, provided a basis for further debate that this event will produce on the evolution of insolvency law, this time from a British rather than European perspective. In particular, Mr. Hamish Anderson examined the possible need for further reform of domestic law in response to ‘Brexit’.
In his presentation, Mr. Anderson highlighted the implications that Brexit could have on future recognition of UK insolvency proceedings and schemes of arrangement within the European Union, considering that only a limited number of EU countries have so far adopted the UNCITRAL Model Law on Cross-Border Insolvency (whose scope is much more limited than the Insolvency Regulation no. EC/1346/2000, due to be replaced by the recast EU/2015/848).
A consistent number of presentations debated the implications of insolvency rules over other sectors of the economy. For one, Dr. Carlo Corcione (Fratelli d’Amato Shipowners) investigated the effects of the financial and economic crisis within the shipping industry. He highlighted how this affected the market, and he reported on the development of best practices among the Italian key players in the financial and maritime industries. Finally, he observed how these informal negotiations relied on the existence and implementation of certain out-of-court or hybrid insolvency proceedings under Italian insolvency law, and how these circumstances affect the evolution and development of Italian insolvency law.
A similar approach was followed by Dr. Michael Anderson Schillig (King’s College London) to analyse how ‘Blockchain’ – a public, decentralised database storing information on all cryptocurrency transactions, which is not controlled by any single policymaker or regulatory authority – could be used to automate smart contracts for bank restructuring. This is a topical issue, due to the difficulties that some Members States (notably, Italy) are facing to restructure their ailing financial and banking sector. It is questionable, however, whether states would be willing to accept the implementation of a technology that could automatically activate bail-in provisions in the event that certain insolvency events were to occur.
The conference portion of the day concluded with a thought-provoking presentation by Prof. Yvonne Joyce (University of Glasgow), who revealed – based upon the results of an empirical study – how insolvency proceedings are subject to intangible ‘relational’ forces including personal agendas and transitions in political ideology. In doing so, the paper aimed to understand how these forces may consequently impact upon corporate governance during such proceedings.
Moreover, her ongoing research aims at revealing how ethical forces may operate in a way which tempers commercial pressures placed on accountancy practitioners – an area for which Professor Joyce has considerable knowledge and expertise, given her status as a qualified Chartered Accountant.
Finally, the insolvency day event was closed by a symposium organised by the Cross-Border Corporate Insolvency and Commercial Law [CI&CL] Research Group, a non-profit making collaborative network of scholars, professionals and industry insiders which promotes the research on cross-border issues in insolvency law.
The symposium represented an occasion to debate in four round tables the preliminary results on a study carried out in 36 jurisdictions which focused on the treatment of executory contracts in insolvency law. The study adopted a truly global perspective. It aimed at mapping the existing law on the topic, investigating the primary ‘drivers’ behind recent reforms, and establishing a set of criteria to evaluate the reasonableness and efficiency of national policies.
On the day of the conference, contributors from twelve jurisdictions presented the results of their research. The debate that followed allowed the contributors and the organising committee to progress their research, in regards to improving or facilitating the application of the law in the considered countries (national recommendations), and at challenging ongoing trends and established policy recommendations by adopting a proactive approach toward legal reform at an international level (general guidelines).