It is proposed that Australia enact the UNCITRAL Model Law on Cross-Border Insolvency, subject to the proposals below regarding the details of implementation.
It is proposed that the enactment of the UNCITRAL Model Law be by separate enactment of the Commonwealth Parliament.
It is proposed that the Insolvency and Trustee Service Australia consider and make recommendations to the Government about the application of the Model Law to individual debtors in Australia. This review would be conducted with a view to applying the Model Law to insolvent corporations and, if appropriate, some or all types of individual debtors at the same time.
It is proposed to exclude corporate entities that are currently subject to special insolvency regimes at the Commonwealth level (including financial institutions) from the scope of the Model Law. Views of States and Territories will be sought on exclusion of further types of entities under special insolvency frameworks.
It is proposed that subsections 601CL(14)-(16) of the Corporations Act 2001 concerning the cessation of business of a foreign company be retained to address circumstances that fall outside the scope of the Model Law or where the Model Law is not invoked. It should be made clear that section 601CL shall not operate in derogation of the Model Law where the Model Law is invoked.
It is proposed that Part 5.7 of the Corporations Act - Winding Up Bodies other than Companies - be retained, but with such changes as are necessary to ensure it operates harmoniously with the proposed Model Law and consistently with the remainder of Chapter 5 of the Corporations Act.
It is proposed that Division 9 of Part 5.6 be retained in relation to external administration matters arising under the Corporations Act.
Subject to the proposal concerning Article 13 below, it is proposed that Chapters I and II of the Model Law (Articles 1-14) be adopted essentially as written.
In relation to Article 13 it is proposed to adopt the optional provision in Article 13(2) that provides that the Model Law does not affect the exclusion of revenue claims by a foreign State from insolvency proceedings under Australian law.
It is proposed that Articles 15 to 18 of the Model Law relating to recognition of a foreign proceeding be adopted as written.
It is proposed that Articles 19 to 24 of the Model Law concerning the consequences of recognition of a foreign insolvency proceeding be adopted as written. For the purposes of Article 20(2), it is proposed that exceptions will be the right of a secured creditor to enforce a security over property of the debtor, or specific relief from the effects of the stay granted by a court. For the purposes of Article 23(1), it is proposed to specify the voidable transactions provisions in Division 2 of Part 5.7B.
It is proposed that Chapter IV of the Model Law (Articles 25-27) - Cooperation with Foreign Courts and Foreign Representatives - be adopted as written.
It is proposed that Chapter V of the Model Law (Articles 28-32) - Concurrent Proceedings - be adopted essentially as written.
It is proposed that there be included in the provisions adopting the Model Law a facility to provide (by way of regulation or other suitable instrument) for streamlining and tailoring the Model Law as it applies to particular types of proceedings or proceedings involving a specific State.